What’s wrong with monopoly?
MR
$/Q
Q/t
D=AR
MC=AC
Q
c
P
c
w
all producer’s surplus,
w
In exchange, consumers “bribe” the
monopolist by transferring back:
w
plus (say) half of the DWL.
w
Now
both
are better off.
Ah, but
transaction
costs!
P
m
Q
m
