The dominant company’s market share tends to decrease as profits
attract entry by other companies.
Economics MCQ - Economics Section 1
In first degree price discrimination the seller is able to capute all of the
consumer surplus.
Economies of scale and regulation may sometimes make monopolies
more efficient than perfect competition.
Government regulation may attempt to improve resource allocation by requiring the monopolist to institute average cost pricing or marginal cost pricing. The monopolist will least likely be allowed to institute first degree price discrimination.
Under an oligopolistic pricing strategy, competitors will not follow a price
increase but will cut their prices in response to a price decrease by a
competitor. Hence the demand curve is kinked.
