Monopoly: One Seller, All the Power
Quality reviewed September 2026
- Grades
- Grades 9-12
- Time
- About two 50-minute class periods
- Includes
- 11 ready-to-teach files
- Format
- Word (.docx) · PowerPoint (.pptx)
- Slide deck
- Guided notes
- Guided notes teacher key
- Activity + answer key
- Quiz + answer key
- Exit ticket + answer key
- Teacher guide
- Teacher presentation notes
What students do
- Define monopoly using its four features and contrast it with the perfect competition studied in the previous lesson
- Read a monopoly pricing diagram to find the quantity where marginal revenue equals marginal cost, then trace up to the price the demand curve will bear
- Calculate the deadweight loss triangle a monopoly creates compared to the competitive equilibrium
- Evaluate why the electric utility grid is regulated as a natural monopoly instead of broken into competing firms
What it covers
- The four defining features of monopoly, one seller, no substitutes, high barriers to entry, and price-maker pricing
- How a monopoly picks its price using the two-step MR equals MC rule
- Why utilities are treated as natural monopolies, and the real household cost, roughly $50 to $80 a year, of leaving one unregulated
Learning targets
- Define MONOPOLY using the four defining features (one seller, no close substitutes, high barriers to entry, price-maker firm) and contrast it with the four conditions of Perfect Competition from TK 21
- Read a monopoly pricing diagram - locate the QUANTITY where MR=MC, trace UP to the demand curve for the PRICE the monopoly charges, and compute the price/quantity gap vs the competitive equilibrium
- Explain DEADWEIGHT LOSS as the welfare triangle society loses to monopoly pricing, and distinguish REGULATED monopolies (utilities, patents) from UNREGULATED ones using real U.S. examples
Peek inside
The Opposite of Perfect Competition
PC: many sellers - Monopoly: ONE seller
PC: identical product - Monopoly: no substitutes
PC: free entry - Monopoly: HIGH barriers
PC: price-taker - Monopoly: price-MAKER
The Opposite of Perfect Competition
PC has many sellers - monopoly has seller.
PC has identical product - monopoly has no .
PC has free entry - monopoly has HIGH .
PC firms are price-takers - monopolies are price- .
Real U.S. Monopolies Today
1. In perfect competition a firm is a price-taker that must accept the market price. A monopoly is the opposite: it SETS its own price by choosing how much output to produce, so economists call it a price- .
Why this matters
Why can't I just switch electric companies the way I'd switch a cell carrier? That question is the lesson: the electric grid is regulated as a monopoly, one seller, no substitutes, high barriers to entry, because duplicating every pole and wire in a neighborhood makes no economic sense.
Students start out assuming a single seller must be gouging its customers, when the real cost of an unregulated utility is calculable: roughly $50 to $80 a year in deadweight loss per household. Once they find that triangle on the diagram themselves, the MR-equals-MC rule explains the number on their own bill.
From one teacher to another
Coming right after the perfect competition lesson, this one flips the script hard, one seller with real power to set price instead of thousands of price-takers. The electric utility example does the heavy lifting because it hands students a natural monopoly they're already paying into every month, and the deadweight loss number makes the cost of leaving one unregulated concrete instead of abstract. Once they can read the MR equals MC pricing rule off a diagram, the rest of Unit 3 gets a lot easier.
Every file in this toolkit
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Activity (Student)
Dr. Elena Reyes must recommend a fate for the regional electric utility, so you find where marginal revenue crosses marginal cost, sketch the deadweight loss triangle, compare brand and generic drug prices, then score four real markets on the four monopoly features.
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Activity (Answer Key)
The MR-equals-MC quantity and price get solved step by step, the deadweight loss triangle gets its three corner coordinates, and four real markets from electric utilities to the Postal Service get scored on every monopoly feature. A policy memo closes the packet with a sample recommendation.
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Exit Ticket (Student)
Questions identify the monopoly example with no close substitute, what price a firm charges once it finds the MR-equals-MC quantity, and how monopoly output and price compare to the competitive equilibrium. A real monopoly gets named, with regulation or a breakup recommended.
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Exit Ticket (Answer Key)
A patented insulin drug is the no-substitute example, the MR-equals-MC quantity sets the price that demand will still absorb, and higher price with lower quantity describes the monopoly comparison to competition. The rubric checks for a named example and a clear recommendation.
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Guided Notes (Student)
Marginal revenue crosses marginal cost at quantity 30 on the monopoly pricing chart, and students trace up to find the $14 price a monopoly charges against the $10 competitive price at quantity 50. A drug-pricing chart with brand prices from $180 to $300 tests the same two-step rule again.
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Guided Notes (Teacher Key)
Quantity 30 at $14 for the monopoly against quantity 50 at $10 for competition, plus the 20-unit output gap and $4 markup, stand worked out with their sources. Deadweight loss, natural monopoly, and price discrimination are ready for a teacher to reference.
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Quiz (Student)
A pricing diagram has students trace where marginal revenue crosses marginal cost at quantity 30, and a separate item asks how long a utility patent's protection lasts as a barrier.
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Quiz (Answer Key)
Deadweight loss gets defined as value that never gets produced, brand-name drugs price out near 20 times their generic versions, and the Sherman Antitrust Act stands as the law behind Standard Oil's breakup.
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Slides
Four features define monopoly before the deck works the two step pricing rule, find Q where MR equals MC, then read the price off demand, using a diagram with a $14 monopoly price against a $10 competitive one. Patents and utility regulation round out how the U.S. limits the deadweight loss.
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Teacher Guide
Teaching Tips route the electric utility example straight at the deadweight loss triangle, and discussion prompts later pit an antitrust breakup against a patented drug's twenty year monopoly window.
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Teacher Presentation Notes
A patent holder's 20 year run gets paired on one card with the electric grid's wired-in territory, both feeding the same two-step script for finding where marginal revenue crosses marginal cost.
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