A monopoly is a firm that is a sole seller in a market. Monopolies can decide to set different prices for different consumers through price discrimination. In monopolistic competition, there are many firms that sell products that are similar but not identical.
First, play the simulation game Price Discrimination in the MindTap environment. In this discussion, you will share your experiences playing that game. Your work in this discussion will directly support your success on the course project.
In your initial post, include the image of your simulation report in your response. See the How to Submit a Simulation Report Image PDF document for more information. Then, address the following questions:
- Explain which types of market inefficiencies derive from monopolies. Use examples from the textbook to support your claims.
- Describe the types of inefficiencies that derive from monopolistic competition. Use examples from the textbook to support your claims.
- How are monopolies and monopolistic competitive firms profitable? Use examples from the textbook to support your analysis.