Monopoly

A

B

C

D

E

A

B

C

D

E

Normal profits

Economic losses

Economic profits

Accounting profits

marginal cost curve

average total cost curve

average fixed cost curve

average variable cost curve

different to other firms

higher than other firms

lower than other firms

similar to other firms

Single seller

Many sellers

Many substitutes

No barrier to entry

earn smaller profit

produce lower quantity than before price discrimination

charge a higher price when demand is inelastic and a lower price when demand is elastic

charge a higher price when demand is elastic and a lower price when demand is inelastic

can only be a perfectly competitive market.

might be an oligopoly or a perfectly competitive market.

might be a monopolistically competitive or a perfectly competitive market.

might be a perfectly competitive, monopolistically competitive, oligopoly, or monopoly market.

can only be a monopolistically competitive market.

the products produced by different firms are not identical

there are a small number of firms in the market

the product is produced by using scarce resources

it is easy for firms to enter or exit the market

Perfect competition

Monopoly

Oligopoly

Monopolistic Competition

Public transport discounts for students and the elderly

Airlines charging higher prices during holiday season

Petrol stations providing cheaper fuel on certain days of the week

Differences in price between first class and economy class air travel

Normal profits

Economic losses

Economic profits

Accounting profits

different to other firms

higher than other firms

lower than other firms

similar to other firms

the products produced by different firms are not identical

there are a small number of firms in the market

the product is produced by using scarce resources

it is easy for firms to enter or exit the market

productively efficient

allocatively efficient

profit maximizing

True

False

True

False

It exploits consumers, especially the poor

It achieves productive efficiency

It provides lower prices when the quantity purchased rises

It charges different prices for the same product

different …same

same …same

same...different

different …different

Perfect competition

Monopoly

Oligopoly

Monopolistic Competition

upward sloping.

downward sloping.

horizontal.

vertical.

downward sloping; horizontal

horizontal; downward sloping

upward sloping; horizontal

downward sloping; upward sloping

zero

$5

$7

$5.50

$15; 100

$12; 200

$6; 400

$9; 300

barriers to entry and no close substitutes.

franchises and barriers to entry.

barriers to entry and close substitutes.

close substitutes and no barriers to entry.