Microeconomics

Assignment on History of Economic (ECN 202)

BERNARD OKPE
Reg. No./Group/Level: Department & Faculty: Economics & Social Sciences Question 1: With the aid of a diagram, show the Equilibrium position of the Monopolist in a short run Question 2: Differentiate between Partial and general equilibrium point

ANSWER1: With the aid of a diagram, show the Equilibrium position of the Monopolist in a short run Introduction Monopoly is a market structure characterized by a single seller of a unique product with no close substitutes. This is one of four basic market structures. The other three are perfect competition, oligopoly, and monopolistic competition. As the single seller of a unique good with no close substitutes, a monopoly has no competition. The demand for output produced by a monopoly is the market demand, which gives monopoly extensive market control. The inefficiency that results from market control also makes monopoly a key type of market failure. Monopoly is a market in which a single firm is the only supplier of the good. Anyone seeking to buy the good must buy from the monopoly seller. This single-seller status gives monopoly extensive market control. It is a price maker. The market demand for the good sold by a monopoly is the demand facing the monopoly. Market control means that monopoly does not equate price with marginal cost and thus does not efficiently allocate resources. Characteristics of monopoly The four key characteristics of monopoly are: 1. Single Supplier: First and foremost, a monopoly is a monopoly because it is the only seller in the market. The word monopoly actually translates as "one seller." As the only seller, a monopoly controls the supply-side of the market completely. If anyone wants to buy the good, they must buy from the monopoly. 2. Unique Product: A monopoly achieves single-seller status because the good supplied is unique. There are no close substitutes available for the good produced by a monopoly. 3. Barriers to Entry: A...