Evaluating Monopoly. Comparison with Perfect Competition. Market outcomes and efficiency. Higher price and lower output compared to the PC industry. Fig. 7.14 Impacts on surpluses (Fig. 7.15):
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Comparison with Perfect Competition
Costs > ATC
ATC > minimum ATC
A merger is an agreement between two or more firms to join together and become a single firm. Reasons may be: capturing economies of scale, growing, acquiring monopoly power.
P efficiency, by preventing monopolistic behaviour by a firm or group of firms. Example: Microsoft.