Do the U.S. antitrust statutes protect competition or competitors? What is the difference?
The Hair Stylist, Ltd., has a monopoly in the College Park market because of restrictive licensing requirements, and not because of superior operating efficiency. As a monopoly, the Hair Stylist provides all industry output. For simplicity, assume that the Hair Stylist operates a chain of salons and that each shop has an average cost-minimizing activity level of 750 hair stylings per month, with marginal cost = average total cost = $20 per styling.
Assume that demand and marginal revenue curves for hair stylings in the College Park market are:
P = $80 - $0.0008Q
MR = $80 - $0.0016Q
Where P is price per unit, MR is marginal revenue, and Q is total firm output (stylings).
2. Calculate monopoly profits, and discuss the "monopoly problem" from a social perspective in this instance.© BrainMass Inc. brainmass.com October 9, 2019, 5:51 pm ad1c9bdddf
U.S. antitrust statutes are briefly evaluated.