Course: Principles of Microeconomics (ECON 1) · Silver Oak University (fictional sample) · Prof. Kessler
Focus: Monopoly — Market Power, MR = MC & the Cost of Restricted Output · Objective 6 · SLO A & B

📋 Module Overview Page — "Start Here" (Canvas: Page, published)

Week 11 — Monopoly

Last week you saw how a price-taking firm in a perfectly competitive market sets output where P = MC and earns zero economic profit in the long run. This week you meet the opposite: a monopolist who faces the whole market's demand curve, charges a price above marginal cost, and restricts output — creating a deadweight loss for society in the process.

The big question: When a single seller controls a market, how does it decide what to charge and how much to produce — and what does society lose?

By the end of this week, you can:

• explain why a monopolist's marginal revenue is less than price (MR < P) and derive the MR curve from a linear demand curve;
• set MR = MC to find the profit-maximizing quantity (Q), then read the price off the demand curve* — NOT off the MR curve (the #1 trap);
• compare the monopoly outcome to the competitive benchmark and compute the deadweight loss;
• evaluate price discrimination and explain how it changes output and welfare;
• discuss sources of market power (barriers to entry, patents, network effects) with an evenhanded eye toward both their costs and their rationale.

Do this, in order:

1. Read & watch — the Week 11 resources (≈40 min). → Readings & Resources page
2. Lecture Tutorial — work through MR, MR = MC, and deadweight loss with your AI tutor (≈45 min). Due Sun, Nov 15. → submit the chat share link + summary
3. Practice Exercises — 6 quick reps, ungraded (≈15 min).
4. Quiz 11 — 10 questions, closed to AI (≈20 min). Due Sun, Nov 15.
5. Discussion 11 — market power & antitrust (or patents). Initial post Fri, Nov 13, replies Sun, Nov 15.
6. Assignment 11 — the monopoly problem set (100 pts). Due Sun, Nov 15.
7. Workshop 11 — Graph & Model Workshop — derive MR, find Qm and Pm, and compute DWL (50 pts). Due Sun, Nov 15.

One warning before you start: the single most common mistake in monopoly analysis is reading the price off the MR curve instead of the demand curve. After you set MR = MC to find the quantity, you always look back up to demand to find the price. We'll drill this all week.

📣 Welcome Announcement (Canvas: Announcement; available Mon, Nov 9)

Subject: Week 11 — When One Seller Runs the Whole Show 🏭

Hi everyone,

This is the week microeconomics gets a little darker — in a useful way.

So far we've studied markets where no single buyer or seller controls the price. This week we flip that. A monopolist faces the entire market's demand curve, so every extra unit it sells requires dropping the price on all its units. That wedge between price and marginal revenue (MR < P) is the engine of everything in monopoly analysis.

Here's the trap I see every semester: after finding the monopoly quantity (set MR = MC), students read the price off the MR curve. That gives the marginal cost, not the price. You must look back up to the demand curve. We'll hit this four or five times this week until it's automatic.

The economic consequences are real: monopoly output is lower than the competitive benchmark, price is higher, and the gap between the two — the deadweight loss — represents transactions that both parties would have valued but never happened.

Start with the Module Overview, then the readings, then your AI Lecture Tutorial.

See you in class,
Prof. Kessler