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    Monoply Market Structure

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    The water company is privately owned and is the only water company in town. It is licensed and franchised by the city for a 10 - year term, just renewed. They advertise on TV, enclose a newsletter with their bills, and donate to local school activities. Why do they do these things?

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    The water company still faces a downward sloping demand curve (even though it is a monopoly). Thus, higher the prices it charges, ...

    Solution Summary

    The solution tries to answer questions related to monopolies and why they do certain things.