>> Business Economics
In a pure monopoly, the monopolistic firm is the only one selling the product, therefore there are no constraints on what the firm can charge or on the profit it can make. Do you agree? Why?
Discuss various barriers to entry into an industry, explaining how they can engender a monopoly situation. Are any of these socially desirable? Why?
Assuming that the same cost curves apply to both purely competitive and monopolistic industries, compare their relative performance in terms of price, output, and profit. Use diagrams. Since industries of both kinds produce at a level at which marginal cost equals marginal revenue, to what do you attribute the differences between their performances?