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Lecture 17

ECO101H1 Lecture 17: Monopoly

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Department
Economics
Course
ECO101H1
Professor
All Professors
Semester
Fall

Description
ECO100 Lecture 17 : Monopoly Why is Monopoly Bad? Non Economist: price will be too high hurts consumers Monopoly profits Economist: Allocatively inefficient reduced output Not monopoly profits Monopolists Profit? If consumer pays 1 more to producer as a result of monopoly price: Consumer worse off by 1 Producer better off by 1 Transfer from consumer to producer Is consumer more deserving? Is producer more deserving? Who decides? Welfare cost of monopoly is los otal surplus as output is reduced Perfect Competition: P = MC Allocatively efficient Monopoly: P > MC Not allocatively efficient Source: tutor2u
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