Monopoly is a word derived from Greek origins that means, roughly, single seller. Why is the definition of monopoly as single seller inadequate in economic terms?
Single seller does not go far enough to describe the situation implied by the economic concept of monopoly. There are many single sellers. McDonald's is the single seller of Big Macs, General Motors is the single seller of Pontiacs, and Pentel is the single seller of the QE405 mechanical pencil. But none of these single sellers poses any unique problems for economic analysis because each has good substitutes. The notion of monopoly becomes significant only when it means the single seller of a product for which there are no good substitutes.
You might also like to view...
The rule of 72 says that at 6% interest $100 should become $200 in about:
A. 7.2 years B. 100 months C. 12 years D. 72 months
A property tax discourages improvements that would increase the value of the property
a. True b. False
Refer to the above figures. A negative externality existed but has been corrected. Price and quantity will be
A) P1 and Q1. B) P2 and Q2. C) P3 and Q3. D) P4 and Q4.
How will each of the following affect the steady-state growth rate of the standard of living? Assume the economy is currently in the steady state
a. an increase in the depreciation rate b. an increase in the growth rate of labor-augmenting technological change c. a decrease in the saving rate d. a decrease in the labor-force growth rate