ECON 1B03 Lecture Notes - Lecture 9: Price Discrimination, Competitive Equilibrium, Demand Curve

• School: McMaster University
• Department: Economics
• Course: ECON 1B03
• Professor: Hannah Holmes

Document Summary

Module #38 - 9. 3 monopoly public policy and price. Since monopolies ae socially inefficient, sometimes the government gets involved in one of 3 ways: Legislation to prevent mergers that would make the market less competitive. Government agencies regulate the prices a monopoly may charge i. Often, will set p= atc so firm earns normal profits. These may not be run efficiently because the government. These may not be run efficiently because the government may not care as much as private owners about keeping costs down. The government may just decide to do nothing and stay out of it i. If the inefficiently is small by society"s standard, the government may stay out of it. Price discrimination: the business practice of selling the same good at different prices to different customers, even though the costs for producing for two customers are the same.