Economics Readings Site By Colin Ong

This blog has been created to provide an area for economics students to read about how economics impacts daily life. It is especially useful for students to understand the application of macroeconomics as communicated through the media and governmental websites.

This online resource has been set up for educational purposes.All rights are reserved by the various websites.

For further clarification, please email colin@mrmc.com.sg

Diagram - Monopoly

clipped from www.bized.co.uk
A monopolist has the whole market and so faces the market demand curve. They will produce where marginal cost is equal to marginal revenue at a price given by the demand curve (average revenue).



Next Diagram

Brief description: A monopolist has the whole market and so faces the market demand curve. They will produce where marginal cost is equal to marginal revenue at a price given by the demand curve (average revenue).

Detailed description: Area 1 shows the amount of consumer surplus under monopoly. Areas 2 and 4 are the amount of producer surplus. Areas 3 and 5 both represent deadweight resource losses under monopoly. Areas 2 + 4 + 6 give the total amount of revenue earned by the firm from selling their product.

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