Monopoly in General
This is a pretty special example with, as I have said, a lot of simplifying assumptions. Can the conclusions be generalized? To some extent, they can. In general,
- A monopoly will charge more than a competitive industry with the same cost conditions
- The monopoly will sell less output
- In long run equilibrium, the monopoly will receive economic profits
- There will be a net loss of consumers' surplus relative to P-competitive equilibrium
- This net loss is very roughly proportional to the monopoly profit.
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