Microeconomics: Monopoly

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KEY TERMS

  • Monopoly: when a single firm dominates the market 
  • Perfect competition: where a large number of firms compete in a market 
  • Productive effiency: where a firms output is produced at the lowest possible average total cost (this is measured by total cost/output)

CAUSES OF MONOPOLY

  • Unfair competitive practices
  • Cost of entry into market barrier
  • Statutory monopolies
  • Established brand
  • Patent and copyrights

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