What’s wrong with monopoly?
w
Monopoly restricts output and raises price
relative to the competitive benchmark.
MR
$/Q
Q/t
D=AR
MC=AC
Q
c
Q
m
P
c
w
Some consumers’ surplus becomes
producer’s surplus (profit).
P
m
w
Is this what is wrong
with monopoly?
Transfers of
surplus can be
regressive
or
progressive
.
CS
PS
