We write the percentage markup of price over marginal cost as (P MC)/P. For a profit-maximizing monopolist, how does this markup depend on the

elasticity of demand? Why can this markup be viewed as a measure of monopoly power?

Why might a firm have monopoly power even if it is not the only producer in the market?

What factors determine the amount of monopoly power an individual firm is likely to have? Explain each one briefly.

Why will a monopolist's output increase if the government forces it to lower its price? If the government wants to set a price ceiling that maximizes the monopolist's output, what price should it set?

What is meant by the term "monopsony power"? Why might a firm have monopsony power even if it is not the only buyer in the market?

Why is there a social cost to monopsony power? If the gains to buyers from monopsony power could be redistributed to sellers, would the social cost of monopsony power be eliminated? Explain briefly.

Explain briefly how the U.S. antitrust laws are actually enforced.