MODULE 61: Introduction to Monopoly

Chapter Introduction

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MODULE 61

Introduction to Monopoly

In this Module, you will learn to:

Identify the profit-maximizing price and quantity for a monopolist
Determine whether a monopoly is earning a profit or a loss

In this module we turn to monopoly, the market structure at the opposite end of the spectrum from perfect competition. A monopolist’s profit-maximizing decision is subtly different from that of a price-taking producer, but it has large implications for the output produced and the welfare created. We will see the crucial role that market demand plays in leading a monopolist to behave differently from a firm in a perfectly competitive industry.