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Which curve is the demand curve? Curve 1 Which curve is the marginal revenue curve? Curve 2 Why?

Test Yourself Monopoly. Which curve is the demand curve? Curve 1 Which curve is the marginal revenue curve? Curve 2 Why? For a monopoly to sell more, they must decrease price, therefore marginal revenue is less than demand. Market power because only one firm. $. 1. 2. Quantity.

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Which curve is the demand curve? Curve 1 Which curve is the marginal revenue curve? Curve 2 Why?

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  1. Test Yourself Monopoly • Which curve is the demand curve? • Curve 1 • Which curve is the marginal revenue curve? • Curve 2 • Why? • For a monopoly to sell more, they must decrease price, therefore marginal revenue is less than demand. Market power because only one firm. $ 1 2 Quantity

  2. Test Yourself Monopoly • What is equilibrium price and quantity for perfect competition? • P2Q2 • What is equilibrium price and quantity for perfect competition? • P1Q1 • Why? • Set MC = MR and read price off demand curve $ MC P1 P2 P3 D MR Q1 Q2 Quantity

  3. Test Yourself Monopoly • What is CS for a monopoly? • CS = WTP - price • What is PS for a monopoly • PS = price - cost • What is deadweight loss? • Loss in surplus because not at efficient point $ MC P1 P2 P3 D MR Q1 Q2 Quantity

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