This lesson covers Topics 4.1-4.2 in the AP Syllabus. Today we will study our second market structure, monopoly.
Learning Target
Analyze the ways in which incentives influence what is produced and distributed in a market system.
Evaluate the extent to which competition among sellers and among buyers exists in specific markets.
Describe the consequences of competition in specific markets.
Criteria for Success
I will be able to use ideas related to pure monopoly to analyze economic problems.
I will be able to demonstrate this understanding using a graph of the aforementioned model.
______________________________________________________________
Assignments
Read: Krugman (Module 61)
Watch: The video lecture for today's topic (linked above).
Optional: The videos linked below.
Khan Academy (Not required)
_______________________________________________________________________________________________________________
Formative Assessment (MCQ's): You will take a formal assessment during class. The assessment will consist of multiple-choice questions and one FRQ from an old AP Exam. Doing the problem of the day and ensuring that you understand it will help you prepare for today's formative assessment and help to ensure that you understand the concepts in this lesson.
Problem of the Day: Assume the apple industry is a pure monopoly.
Identify the rule used by the monopolist to determine the quantity he/she produces. Draw a diagram in which you show each of the following in this market: Price, quantity, monopoly profit.
Also, contrast equilibrium price and output in monopoly with perfect competition by showing on your graph from (1) the price and quantity that would have occurred in a perfectly competitive apple market. Then explain in words how they differ.
Is this industry allocatively and productively efficient? Use your diagram to explain.