Journal Entry #15: Topic: What is a Monopoly?

Different economists might have various interpretations on "What is a Monopoly?"; however, those differences have three commonalities, which are one single seller in the market, an unique product, and barriers to entry keep other competitors out. Since monopoly firm has no competitors, people might ask, how do they determine product's price? By looking at the graph of monopoly firm, we can see there are marginal cost, marginal revenue and demand curve. This is crucial for monopoly firm; as a result of a monopoly firm has to discover a point, where marginal revenue equals to marginal cost in order to maximize its profit. A monopoly firm has the benefit of controlling the entire market price of certain product, and a firm can also use advertisement to demonstrate the product's uniqueness in order to attract more consumers. Costs of Monopoly happen when a monopolist produces less output and sells it at a higher price than a perfectly competitive firm. According to the video, economists dislike monopoly ; as a result of its inefficiency. Personally, I think CollegeBoard is a good monopoly firm, because the creation of this monopoly balances the fairness of standardized test. Everyone has equal opportunity to demonstrate their academic performances. I think it's worthy to attain Monopoly because we can minimize those influential factors, which could cause by other competitive firms, while maximizing our profits in the market.