In this module we introduce one firm into the market with cost curves as described in the previous section and explain why a profit-maximizing monopolist would choose an output level such that marginal revenue equals marginal cost. We also determine the profit-maximizing price, profit level, and consumer surplus. The module also discusses how a monopoly firm could take greater advantage of consumers by engaging in price discrimination.

Theory of Monopoly - 50 minutes

Price Discrimination - 15 minutes