wHY Monopolies Arise

Barriers to entry is caused by 3 points :

• Strategic ownership of factors of production
• Government give  the exclusive right to the one firm to produce goods
• Production cost make a single producer more efficient than a large number of producers. 

Government - Created Monopolies
 A firm maybe limit entry with give a firm an exclusive right to sell good in the certain markets.
Governments- Created Monopolies
Patents and Copyrights law are two examples how government create a monopoly to meet the public needs.
Natural Monopolies
A firm is a natural monopoly  when a firm can supply goods and services.

Monopoly

 If a Competitive Firm is a price taker, so a monopoly firm is a price maker.
Terms :

• There is one firm in the market
• There is not other seller which can sell a substitution for output. 
• There is a barriers to other firm to entry.

Why monopolist arise?  Main cause monopoly is "barriers to entry"
Monopoly Resources
Although exclusive ownership of a key resource is a potential source of monopoly, in practice monopolies rarely arise for this reason.
A monopolist revenue
TR = P * Q = TR
TR/Q = AR = Q

Marginal Revenue
delta TR / delta Q = MR

NICE Jewelry

Long Run Market Supply

• In the Long-Run firm gets zero profit
• If the Long-Run, supply curve industry is perfectly elastic. The market is called Constant-cost Industry. It has means if output rises, so it does not effect input price.

2 Possible :

• Increasing-cost Industry

Cost structure rise because price of input rise with new firm entry to the market and existing firms expand the business. So, LR Supply Curve is positive.

• Decreasing-cost Industry

Cost structure decreased because the price of input decreased with output industry. So, LR Supplu is negative

Coconut Oil

Long-Run Competitive Equilibrium

• Zero profit does not mean that firm do not get anything to every unit work down. 
• Equilibrium of producer in optimal scale of plant (Long-Ru Total Cost minimum  and Long-Run Average Cost also minimum. 
• Producers just produce normal profit, can not produce profit again.

An Increase in Demand
Increase demand support price is higher and more much profit

• Existing firm increase outpt
• New firm entries market, increase output continuous
• The price fall down until  all profit be eroded. 
• If the price of input  ts constant new equilibrium will present in original price but output are higher.
• Original firms will be back in position original output , but the firm in market is too much, total output will increase.
• In the short run, price levels adjust, but in the long-run adaption is done by quantity.

Vegetable