©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.chapterchapterfourteenfourteenPreparedby:Fernando&YvonnQuijanoMonopolyandAntitrustPolicy2of30©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER14:MonopolyandAntitrustPolicyInthischapter,wewilldevelopaneconomicmodelofmonopoliesthatcanhelpustoanalyzetheireffectsontheeconomy.Afterstudyingthischapter,youshouldbeableto:Definemonopoly.Explainthefourmainreasonsmonopoliesarise.Explainhowamonopolychoosespriceandoutput.Useagraphtoillustratehowmonopolyaffectseconomicsurplus.Discussgovernmentpoliciestowardmonopoly.TimeWarnerRulesManhattanLEARNINGOBJECTIVES123453of30©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER14:MonopolyandAntitrustPolicyIsAnyFirmEverReallyaMonopoly?LEARNINGOBJECTIVE1MonopolyTheonlysellerofagoodorservicethatdoesnothaveaclosesubstitute.4of30©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER14:MonopolyandAntitrustPolicyIsXboxaCloseSubstituteforPlayStation2?14-1Tomanygamers,PlayStation2isaclosesubstituteforXbox.5of30©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER14:MonopolyandAntitrustPolicyIstheXbox360aCloseSubstituteforthePlayStation3?MakingtheConnectionTomanygamers,Microsoft’sXboxisabetterdealthanPlayStation3.Definemonopoly.14.1LEARNINGOBJECTIVEWithconsumersapparentlyviewingthetwosystemsprimarilyasgameconsoles,theXboxhadasignificantadvantagebecauseitwaspriced$100lessthanthePS3.YOURTURN:Testyourunderstandingbydoingrelatedproblem1.7attheendofthischapter.6of30©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER14:MonopolyandAntitrustPolicyWhereDoMonopoliesComeFrom?LEARNINGOBJECTIVE2Barrierstoentrymaybehighenoughtokeepoutcompetingfirmsforfourmainreasons:1.Governmentblockstheentryofmorethanonefirmintoamarket.2.Onefirmhascontrolofakeyrawm...
