Economics
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Boundless Economics
Monopoly
Impacts of Monopoly on Efficiency
Economics Textbooks Boundless Economics Monopoly Impacts of Monopoly on Efficiency
Economics Textbooks Boundless Economics Monopoly
Economics Textbooks Boundless Economics
Economics Textbooks
Economics
Concept Version 7
Created by Boundless

Reasons for Efficiency Loss

Imperfect competition

Imperfect competition

This graph shows the short run equilibrium for a monopoly. The gray box illustrates the abnormal profit, although the firm could easily be losing money. A monopoly is an imperfect market that restricts the output in an attempt to maximize its profits.

Source

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    "Imperfect competition in the short run."
    http://commons.wikimedia.org/wiki/File:Imperfect_competition_in_the_short_run.svg Wikimedia CC BY-SA.

Related Terms

  • monopoly
  • market failure
  • inefficient
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