Free Trial

Safari Books Online is a digital library providing on-demand subscription access to thousands of learning resources.

  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

17. Price and Output Determination Under... > Short-Run Equilibrium of the Monopol...

SHORT-RUN EQUILIBRIUM OF THE MONOPOLY: PRICE AND OUTPUT DETERMINATION

According to the traditional theory of firm, a firm is said to be in equilibrium where it maximizes its profit. As in case of perfect competition, equilibrium of a monopoly is studied under both short-run and long-run conditions. In this section, we explain price and output determination under monopoly in the short run. The equilibrium of monopoly in the long run will be discussed in the next section.

The short-run equilibrium of monopoly can be explained by two approaches:

  1. Total revenue–total cost (TRTC) approach and
  2. Marginal revenue–marginal cost (MRMC) approach

The short-run equilibrium of monopoly is explained below by both the approaches—first by TRTC approach and then by MRMC approach.


  

You are currently reading a PREVIEW of this book.

                                                                                                                    

Get instant access to over $1 million worth of books and videos.

  

Start a Free 10-Day Trial


  
  • Safari Books Online
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint