Monopoly, Deadweight Loss, and

1
Monopoly, Deadweight Loss, and Technical
(Productive) Efficiency
2
COST
ATC
PRICE
AVC
MC
ATC
1 FIRM
AVC
MC
OUTPUT
MARKET
PRICE
S
PRICE
D
QUANTITY
3
COST
ATC
AVC
MC
ATC
1 FIRM
PRICE
AVC
MC
OUTPUT
MARKET
PRICE
PRICE
D
QUANTITY
4
COST
ATC
MC
AVC
PRICE
AVC
OUTPUT
PLANT CAPACITY
5
COST
ATC
AVC
MC
ATC
AVC
MC
OUTPUT
6
PRICE
DEMAND
COST
REV.
/
ATC
AVC
MC
ATC
AVC
MC
OUTPUT
OUTPUT
MR
7
COSTS
P.S.1
P.S.7
ATC1
ATC7
P.S.2
LRAC
ATC2
P.S.3
PRICE
ATC3
P.S.4
P.S.5
ATC4
ATC5
ATC6
OUTPUT
8
COSTS
P.S.1
P.S.7
ATC1
ATC7
P.S.2
LRAC
ATC2
P.S.3
ATC3
P.S.4
P.S.5
ATC4
ATC5
ATC6
PRICE
OUTPUT
9
COSTS
P.S.1
P.S.7
ATC1
ATC7
P.S.2
LRAC
ATC2
P.S.3
D
ATC3
P.S.4
P.S.5
MR
ATC4
ATC5
ATC6
OUTPUT
10
COST
REV.
/
ATC
AVC
MC
PLANT
ATC
SIZE
5
AVC
MC
DEMAND
OUTPUT
MR
11
COSTS
P.S.1
P.S.7
ATC1
ATC7
P.S.2
LRAC
ATC2
P.S.3
ATC3
P.S.4
P.S.5
ATC4
ATC5
ATC6
D
MR
OUTPUT
12
COST
ATC
AVC
MC
ATC
AVC
MC
OUTPUT
13
COST
ATC
ATC
OUTPUT
14
COST
ATC
ATC
WITH X INEFFICIENCIES
OUTPUT
15
COSTS
LRAC
OUTPUT
16
COSTS
LRAC
LRAC
WITH X INEFFICIENCIES
OUTPUT
17
S and Marginal Social Cost Pure Competition
PRICE
PRICE
D and Marginal Social Benefit
QUANTITY
18
PRICE
S and Marginal Social Cost Pure Competition
PRICE
D and Marginal Social Benefit
MR
QUANTITY
19
PRICE
S and Marginal Social Cost Pure Competition
PRICE
D and Marginal Social Benefit
MR
QUANTITY
Ineff.
20
S and Marginal Social Cost Pure Competition
MC Mono.
PRICE Pure Comp.
PRICE Mono.
D and Marginal Social Benefit
MR Mono.
QUANTITY
Output Mono.
Output Pure Comp.
Mono. More output and lower price due to lower
MCs resulting from economies of scale
21
Or
22
PRICE
S and Marginal Social Cost Pure Competition
PRICE
D and Marginal Social Benefit
MR
QUANTITY
Ineff.
23
MC Mono.
S and Marginal Social Cost Pure Competition
PRICE Mono.
PRICE Pure Comp.
D and Marginal Social Benefit
MR Mono.
QUANTITY
Output Mono.
Output Pure Comp.
Ineff.
Mono. lower output and higher price due to
higher MCs resulting from X inefficiencies