No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Chapter Eight: Market Structure: From competition to monopoly 179 DESIRED LEARNING OBJECTIVES At the conclusion of this chapter, the student should be able to... § § Relate why monopolies are traditionally criticized § § Describe how pursuit of monopoly profit provides social benefit § § Explain why most monopolists must paradoxically compete, and how they do so § § Recognize the primary enabler of monopoly power is for there to be barriers to entry of other potential competitors § § Summarize the characteristics of a perfectly competitive market § § Identify the profit-maximizing output level is always at MR=MC for all market structures § § Restate why perfectly competitive markets have zero economic profit in the long run § § Describe how price searchers can increase allocative efficiency by price discrimination § § Summarize the theory of contestable markets § § Relate how monopolistically competitive firms compete § § Explain why effective cartels (oligopolies) often benefit from government regulation