LAMC PACE ECON 1 Spring 2011: Topical Review for New Material on Final
Exam. Chapters:15 plus Class Lecture Material
The following is a review of the topics we have covered since the second
midterm and combined with the previous topical reviews should serve as a
review tool for the cumulative final exam.. The list may not be definitive.
2. Chapter 15: Monopoly (price-searcher firm)
A. Derived and calculated marginal revenue for a downward sloping demand curve.
B. Derived the profit-maximizing rule of output: (MR = MC)
C. Analyzed the relationship of price to marginal cost as a measure of market power.
D. Analyzed potential of profits in the short-run and long-run.
E. Role of Profits: Reward for risk-taking
F. Analyzed the potential efficiency loss. (Dead Weight Loss)
G. Discussed the sources of monopoly
H. Discussed the solutions to monopoly power
I. Discussed Price discrimination (Multiple Price Policies)
J. Defined three degrees of price discrimination
K. Described the necessary conditions for successful price discrimination