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2019/11/30
Monopoly
Game Instructions
Monopoly
©2018 MobLab ©2018 MobLab
You have a patent on a new drug. SINGLE MARKET
Sell your product to consumers!
©2018 MobLab ©2018 MobLab
Use the + button to increase the amount of Use the trashbutton to decrease the
product to produce amount of product to produce
©2018 MobLab ©2018 MobLab
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2019/11/30
Profit = (Price - Marginal Cost) x Quantity Press Submit to finalize your decision
©2018 MobLab ©2018 MobLab
What would your profit be
if you sold 4 pallets?
Pre-Game Survey
Demand
MC = Supply
Monopoly
MR
((PPrriiccee –– MMaarrggiinnaall CCoosstt)) ** QQuuaannttiittyy == (($$77 -- $$22)) ** 44 ==$ $$233066
©2018 MobLab ©2018 MobLab
What quantity maximizes profits?
Let’s find out!
Game Time!
Monopoly
©2018 MobLab
©2018 MobLab
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2019/11/30
Compared to the competitive market what
happened to price and quantity?
Post-Game Survey
Demand
MC = Supply
Monopoly
MR
CCMMoooommnnppooeeppttooiittlliiiivvsseett PPPP:::: $$$$5522....00000000 CCMMoooommnnppooeeppttooiittlliiiivvsseett QQQQ:::: 11222244
©2018 MobLab ©2018 MobLab
What quantity maximizes profits?
How much profit could be made as a
monopolist?
Demand Demand
MC = Supply MC = Supply
MR MR
WWhheenn mmaarrggiinnaall rreevveennuuee eeqquuaallss mmaarrggiinnaall ccoosstt!! ((PPrriiccee –– MMaarrggiinnaall CCoosstt)) ** QQuuaannttiittyy == (($$55 -- $$22)) ** 1122 == $$3366
$36
©2018 MobLab ©2018 MobLab
Results Discussion Concept Review
Monopoly Monopoly
©2018 MobLab ©2018 MobLab
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2019/11/30
Compared to the competitive market what
How much profit could be made as a
happened to consumer surplus?
monopolist?
Consumer
Surplus
Demand Demand
MC = Supply MC = Supply
MR MR
CCCCoooonnnnssssuuuummmmeeeerrrr SSSSuuuurrrrpppplllluuuussss:::: $$$$11778822 ((PPrriiccee –– MMaarrggiinnaall CCoosstt)) ** QQuuaannttiittyy == (($$55 -- $$22)) ** 1122 == $$$333666
©2018 MobLab ©2018 MobLab
The different types of monopolies
What is the effect on overall
market efficiency?
• Monopoly over a Resource
–DeBeer’s owned over 80% of the world’s
supply of diamonds at one point.
Deadweight
Loss
• Government-Created Monopoly
–Patents and Copyrights give creators a
Demand
monopoly over a product for a determined
MC = Supply
MR
amount of time.
• Natural Monopolies
–Public Utilities are determined to be able to
provide their service to entire market at a
DDeeaaddwweeiigghhtt LLoossss:: $$1188
lower cost than could two more more firms.
©2018 MobLab
©2018 MobLab
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