2019/11/30
                             Monopoly
                                                                                  Game Instructions
                                                                                           Monopoly
             ©2018                  MobLab                             ©2018                   MobLab
                   You have a patent on a new drug.                                   SINGLE MARKET
                    Sell your product to consumers!
             ©2018                  MobLab                             ©2018                   MobLab
              Use the + button to increase the amount of                    Use the trashbutton to decrease the 
                           product to produce                                  amount of product to produce
             ©2018                  MobLab                             ©2018                   MobLab
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                                                                                                                                            2019/11/30
                  Profit = (Price - Marginal Cost) x Quantity                               Press Submit to finalize your decision
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                                                                                                  What would your profit be 
                                                                                                      if you sold 4 pallets?
                            Pre-Game Survey
                                                                                                                          Demand
                                                                                                                                     MC = Supply
                                       Monopoly
                                                                                                                   MR
                                                                                         ((PPrriiccee  –– MMaarrggiinnaall  CCoosstt))  **  QQuuaannttiittyy  ==  (($$77  -- $$22))  **  44  ==$  $$233066
               ©2018                        MobLab                                    ©2018                       MobLab
                   What quantity maximizes profits?
                                 Let’s find out!
                                                                                                        Game Time!
                                                                                                              Monopoly
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                                                                                      ©2018                       MobLab
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  2019/11/30
                                                                                                                                                                                                                                                                                                                                                        Compared to the competitive market what 
                                                                                                                                                                                                                                                                                                                                                                                  happened to price and quantity?
                                                                                                           Post-Game Survey
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             Demand
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        MC = Supply
                                                                                                                                                       Monopoly
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  MR
                                                                                                                                                                                                                                                                                                                                                                            CCMMoooommnnppooeeppttooiittlliiiivvsseett    PPPP::::    $$$$5522....00000000                       CCMMoooommnnppooeeppttooiittlliiiivvsseett    QQQQ::::    11222244
                                                           ©2018                                                                                                          MobLab                                                                                                                                                                ©2018                                                                                                          MobLab
                                                                                              What quantity maximizes profits?
                                                                                                                                                                                                                                                                                                                                                                          How much profit could be made as a 
                                                                                                                                                                                                                                                                                                                                                                                                                                      monopolist?
                                                                                                                                                                                                       Demand                                                                                                                                                                                                                                                                                Demand
                                                                                                                                                                                                                                                   MC = Supply                                                                                                                                                                                                                                                                          MC = Supply
                                                                                                                                                                             MR                                                                                                                                                                                                                                                                                   MR
                                                                                        WWhheenn  mmaarrggiinnaall  rreevveennuuee  eeqquuaallss  mmaarrggiinnaall  ccoosstt!!                                                                                                                                                                           ((PPrriiccee  –– MMaarrggiinnaall  CCoosstt))  **  QQuuaannttiittyy  ==  (($$55  -- $$22))  **  1122  ==  $$3366
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       $36
                                                           ©2018                                                                                                          MobLab                                                                                                                                                                ©2018                                                                                                          MobLab
                                                                                                           Results Discussion                                                                                                                                                                                                                                                                           Concept Review
                                                                                                                                                       Monopoly                                                                                                                                                                                                                                                                             Monopoly
                                                           ©2018                                                                                                          MobLab                                                                                                                                                                ©2018                                                                                                           MobLab
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                                                                 Compared to the competitive market what 
                                                                                                                                                                                                                                                                                                                                                                 How much profit could be made as a 
                                                                                           happened to consumer surplus?
                                                                                                                                                                                                                                                                                                                                                                                                                            monopolist?
                                                     Consumer
                                                         Surplus
                                                                                                                                                                                                  Demand                                                                                                                                                                                                                                                                         Demand
                                                                                                                                                                                                                                             MC = Supply                                                                                                                                                                                                                                                                    MC = Supply
                                                                                                                                                                        MR                                                                                                                                                                                                                                                                             MR
                                                                                                                             CCCCoooonnnnssssuuuummmmeeeerrrr    SSSSuuuurrrrpppplllluuuussss::::    $$$$11778822                                                                                                                               ((PPrriiccee  –– MMaarrggiinnaall  CCoosstt))  **  QQuuaannttiittyy  ==  (($$55  -- $$22))  **  1122  ==  $$$333666
                                                         ©2018                                                                                                        MobLab                                                                                                                                                            ©2018                                                                                                       MobLab
                                                                                                                                                                                                                                                                                                                                                      The different types of monopolies
                                                                                                  What is the effect on overall 
                                                                                                                          market efficiency?
                                                                                                                                                                                                                                                                                                                                        • Monopoly over a Resource
                                                                                                                                                                                                                                                                                                                                                    –DeBeer’s owned over 80% of the world’s 
                                                                                                                                                                                                                                                                                                                                                            supply of diamonds at one point.
                                                                                                                                                                                                                                                  Deadweight
                                                                                                                                                                                                                                                            Loss
                                                                                                                                                                                                                                                                                                                                        • Government-Created Monopoly
                                                                                                                                                                                                                                                                                                                                                    –Patents and Copyrights give creators a 
                                                                                                                                                                                                  Demand
                                                                                                                                                                                                                                                                                                                                                            monopoly over a product for a determined 
                                                                                                                                                                                                                                             MC = Supply
                                                                                                                                                                        MR
                                                                                                                                                                                                                                                                                                                                                            amount of time.
                                                                                                                                                                                                                                                                                                                                        • Natural Monopolies
                                                                                                                                                                                                                                                                                                                                                    –Public Utilities are determined to be able to 
                                                                                                                                                                                                                                                                                                                                                            provide their service to entire market at a 
                                                                                                                               DDeeaaddwweeiigghhtt  LLoossss::  $$1188
                                                                                                                                                                                                                                                                                                                                                            lower cost than could two more more firms.
                                                                                                                                                                                                                                                                                                                                        ©2018                                                                                                        MobLab
                                                         ©2018                                                                                                        MobLab
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