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Monopoly Diagram
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📈 Economics
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Equations & Parameters
Demand / AR Curve
P =
Parameters
Marginal Cost (MC)
Fixed Cost (FC)
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MR is derived automatically as MR = a − 2bQ (same intercept, double slope).
Key Concepts
•
MR is twice as steep
as the demand (AR) curve for a linear demand
• Profit max: MR = MC, giving Q* and P* on the demand curve
• Green rectangle = economic profit (P* − ATC) × Q*
• Orange triangle = deadweight loss vs perfect competition outcome
• Under perfect competition: P = MC (green dot) — higher output, lower price
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