Notes

Outline

Monopoly. Two systems of belief about monopoly.

Analysis of monopoly. Firm’s demand curve is the market demand curve.

Analysis of monopoly. Monopolist chooses Qm so that MR = MC.

What’s wrong with monopoly? A perfectly competitive industry would choose Qc where D = MC.

What’s wrong with monopoly? Monopoly restricts output and raises price relative to the competitive benchmark.

What’s wrong with monopoly? Monopoly restricts output and raises price relative to the competitive benchmark.

Pareto efficiency. A minimalist criterion of efficiency.

Pareto efficiency.

Pareto efficiency.

What’s wrong with monopoly? Monopoly is not Pareto efficient.

What’s wrong with monopoly?

What’s wrong with monopoly?