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If he/she sets a high price, the sales volume will inevitably decline, if expand the sales volume, the price must be lowered, which means that the demand and price in the monopoly market move in opposite directions. Therefore, the demand curve faced by a monopoly is a downward-sloping curve or a negative slope.
However, demand is the willingness and ability of a consumer to purchase a good under the prevailing circumstances; so, any circumstance that affects the consumer's willingness or ability to buy the good or service in question can be a non-price determinant of demand. As an example, weather could be a factor in the demand for beer at a baseball ...
Natural monopoly, a monopoly in which economies of scale cause efficiency to increase continuously with the size of the firm. A firm is a natural monopoly if it is able to serve the entire market demand at a lower cost than any combination of two or more smaller, more specialized firms.
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At any given price, the corresponding value on the demand schedule is the sum of all consumers’ quantities demanded at that price. Generally, there is an inverse relationship between the price and the quantity demanded. [1] [2] The graphical representation of a demand schedule is called a demand curve. An example of a market demand schedule
1. The production capacity of the two manufacturers is limited. Under a certain price level, the output of a particular Oligopoly cannot meet the market demand at this price level so that another manufacturer can obtain the residual market demand. 2. In a certain period, two prices can exist in the market at the same time. 3.
[1] [2] A monopoly occurs when a firm lacks any viable competition and is the sole producer of the industry's product. [1] [2] Because a monopoly faces no competition, it has absolute market power and can set a price above the firm's marginal cost. [1] [2] The monopoly ensures a monopoly price exists when it establishes the quantity of the ...
The Ramsey problem, or Ramsey pricing, or Ramsey–Boiteux pricing, is a second-best policy problem concerning what prices a public monopoly should charge for the various products it sells in order to maximize social welfare (the sum of producer and consumer surplus) while earning enough revenue to cover its fixed costs.