Week 11 — Monopoly
Why this matters
An island town that depends on one ferry and a family filling a prescription for a patented medicine both face a seller with no close rival.
In plain language
This week you meet a seller with no rivals at all: a monopoly (the only seller of something buyers cannot easily replace). You will see why such a seller cannot raise its price without losing some buyers, and why that makes each extra sale worth less to it than the price it charges. You will use the same profit rule as last week to choose how much the seller offers, then read its price from what buyers will pay. Last, you will measure what buyers lose when one seller controls a market, and weigh antitrust (the laws that police competition) as a debate rather than a settled answer.
- Already covered: Week 6 measured surplus; Week 10 taught MR = MC.
- This week: monopoly, marginal revenue, and what market power costs.
- How they connect: MR = MC still picks the quantity; surplus measures the loss.
- Where we're going next: Week 12 turns to markets with a few rivals.
Focus
Why does a seller with no rivals sell less at a higher price, and what does that cost its buyers?
By the end of this module, you should be able to:
- [ ] compute marginal revenue from a revenue table
- [ ] choose a monopolist's quantity and price
- [ ] compute the deadweight loss of monopoly
- [ ] name the conditions for price discrimination
To-do
Plan your week
- Read Chapter 11 (40–50 minutes), then the lecture and slides.
- Work the tutorial (60–90 minutes) and practice set (15–25 minutes).
- Do the Model Workshop (90 minutes), discussion, and assignment.
- Take the quiz.
This week's checkpoint: from a revenue table, find the quantity where MR = MC and read the price from demand.
You've got this
Take it in order, and ask your instructor early.
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