Monopoly

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Across
  1. 3. Barriers to entry that exist when incumbent firms have cost or demand advantages that would make it unattractive for a new firm to enter the industry
  2. 4. The rule stating that the difference between the profitmaximizing price, and marginal cost, expressed as a percentage of price, is equal to minus the inverse of the price elasticity of demand
  3. 6. A form of second-degree price discrimination in which the consumer pays one price for units consumed in the first block of output (up to a given quantity) and a different (usually lower) price for any additional units consumed in the second block
  4. 9. Barriers to entry that result when an incumbent firm takes explicit steps to deter entry
  5. 13. A rule that states that the optimal price is halfway between the vertical intercept of the demand curve (i.e., the choke price) and the vertical intercept of the marginal cost curve
  6. 14. The power of an individual economic agent to affect the price that prevails in the market
  7. 17. The practice of offering consumers a quantity discount
  8. 19. A market in which, for any relevant level of industry output, the total cost incurred by a single firm producing that output is less than the combined total cost that two or more firms would incur if they divided that output among themselves
  9. 21. The practice of attempting to price each unit at the consumer’s reservation price i.e., the consumer’s maximum willingness to pay for that unit)
  10. 22. A process for sorting consumers based on a consumer characteristic that (1) the firm can see (such as age or status) and (2) is strongly related to a consumer characteristic that the firm cannot see but would like to observe (such as willingness to pay or elasticity of demand)
  11. 24. The horizontal sum of the marginal cost curves of individual plants
  12. 25. A situation in which two or more products possess attributes that, in the minds of consumers, set the products apart from one another and make them less than perfect substitutes
Down
  1. 1. Total revenue per unit of output (i.e., the ratio of total revenue to quantity)
  2. 2. The practice of charging consumers different prices for the same good or service
  3. 5. A versioning strategy in which the firm creates a low-end version of its full-price good by deliberately damaging the product
  4. 7. The conditio that says that a monopolist maximizes profit by producing a quantity at which marginal revenue equals marginal cost
  5. 8. A type of tie-in sale in which a firm requires customers who buy one of its products also to simultaneously buy another of its products
  6. 10. The practice of charging different uniform prices to different consumer groups or segments in a market
  7. 11. A sales practice that allows a customer to buy one product (the tying product) only if that customer agrees to buy another product (the tied product)
  8. 12. Barriers to entry that exist when an incumbent firm is legally protected against competition
  9. 15. A measure of monopoly power; the percentage markup of price over marginal cost
  10. 16. The difference between the net economic benefit that would arise if the market were perfectly competitive and the net economic benefit attained at the monopoly equilibrium
  11. 18. Activities aimed at creating or preserving monopoly power
  12. 20. Factors that allow an incumbent firm to earn positive economic profits while making it unprofitable for newcomers to enter the industry
  13. 23. A strategy of selling two or more versions of a product with different quality levels at different prices
  14. 26. A group of producers that collusively determines the price and output in a market