What you’ll learn to do: explain why a monopoly is inefficient using deadweight loss
In this outcome, you’ll see why monopolies are inefficient. They produce less, at a higher average cost, and charge a higher price than would a combination of firms in a perfectly competitive industry. Because of this, they are neither allocatively or productively efficient.
Here are some of the specific things you’ll learn to do in this section:
- Differentiate between a single price monopolist and a price discriminating monopolist
The learning activities for this section include the following:
- Reading: The Inefficiency of Monopoly
- Reading: Monopolies and Deadweight Loss
- Reading: Price Discrimination
- Self Check: Inefficiencies in Monopolies
Take time to review and reflect on each of these activities in order to improve your performance on the assessment for this section.