In imperfectly competitive output markets and assuming all else is constant, a firm must lower price to sell additional units.

In imperfectly competitive markets, consumers and producers respond to prices that are above the marginal costs of production and/or marginal benefits of consumption (i.e., price is greater than marginal cost in an inefficient market).

Incentives to enter an industry may be mitigated by barriers to entry. Barriers to entry—such as high fixed/start-up costs, legal barriers to entry, and exclusive ownership of key resources—can sustain imperfectly competitive market structures.

A monopoly exists because of barriers to entry.

In a monopoly, equilibrium (profit-maximizing) quantity is determined by equating marginal revenue (MR) to marginal cost (MC). The price charged is greater than the marginal cost.

In a natural monopoly, long-run economies of scale for a single firm exist throughout the entire effective demand of its product.

A firm with market power can engage in price discrimination to increase its profits or capture additional consumer surplus under certain conditions.

With perfect price discrimination, a monopolist produces the quantity where price equals marginal cost (just as a competitive market would) but extracts all economic surplus associated with its product and eliminates all deadweight loss.

Calculate (using data from a graph or table as appropriate) areas of consumer surplus, producer surplus, profit (loss), and deadweight loss in imperfectly competitive markets.