A herbal monopoly is identified by high infrastructure costs and various other obstacles to enattempt relative to the dimension of the sector. It offers the initially entrant astronomical benefit over potential entrants.The monopolist deals with the market demand curve.The size of the industry doesn't make much impact as lengthy as there is only one firm supplying the good or company, it still is a herbal monopoly. It could be secluded tvery own wbelow tright here is only one superindustry. This is an example of herbal monopoly.




You are watching: A small town is served by many competing supermarkets

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Video Transcript

Oh, looking at this. This Chapter 15 problems, too, on this question were provided that we're in a tvery own of many kind of grocery stores, and also each of them challenged the seeing marginal expense. For the initially part of the question, we're asked to assume that they're currently in a competitive sector wbelow all the grocery stores are contending via each various other and also we're around to attract the the graph of the market and also present the customer and also producer and complete surplus. And so you have actually a graph. We have quantity, and also we have actually a price. We have actually, as constantly, a downward dealing with demand also curve. And currently we have bereason we're in a competitive industry, the March profits going equal to guy, and we have this continuous, more venal expense. And so we're going to produce right here at a price that's equal to the marginal cost. All of this is going to be the customer excess. There's going to be no producer Stern blessed bereason currently we're in a perfectly competitive sector and also we have a cost of marginal cost. And though there's no distinction in between the price charged and the marginal price for any amount and some customer surpluses going to equal complete surplus and also there's going to be zero of then weight loss dead, you recognize, Dad, weight loss. For the second component of the question, we are being told that currently all of those grocery stores have actually become one massive monopoly grocery keep and attract the exact same graph aget. Showing the produces excess consumers to plus toaster plus is, well, it's the deadly shed. And so currently we're in a monopoly market, and so we have a downward sloping demand curves. But we likewise have a marginal revenue curve that is below the demand curves. We still have this cost in marginal price and also still here in the monopoly sector, we're goingto be O. The producer is going to produce wright here the marginal revenue amounts to the marginal expense. Here's what's going to be developed, yet they have the right to charge up below on the demand curves that hears the price is going to be charged. And now we have. This is going to suppose a consumer, sir, class, all of this currently, between the price that's charged and also the marginal price, this is going to be the producer excess. And below we have actually and are produced loss and so receiving that on. There's both consumer and producer star. Plus right here is total so cshed the big consumers via Plus compared to the previous question is a lot smaller currently. We have actually additionally have producer sir Plus and also we have this dead weight loss. This was Chapter 15 difficulty Tio.