Sunday, November 2, 2014

Monopoly 3 Loss Minimization

Monopoly 3 Loss Minimization 

Yes, monopolists can have losses, 
  • demand for its product could fall
  • costs could rise
  • governments might demand they make losses (while providing subsidies)
Notice, the firm is producing at profit max, MR = MC, but the ATC is higher than the price it can sell its good. 

2012 AP Microeconomics Exam, FRQ, Q1

Monopoly video - Louis CK - Monopoly Loss

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