Title: PURE MONOPOLY
Headings: PURE MONOPOLY
Characteristics
Barriers to Entry
Demand Curve
Profit –Maximizing Output
Efficiency:

Content: occurs where P = MC. This efficiency is not achieved because price ( what product is worth to consumers) is above MC (opportunity cost of product). It is possible that monopoly is more efficient than many small firms. Economies of scale (natural monopoly) may make monopoly the most efficient market model in some industries. However, X-inefficiency and rent-seeking cost (lobbying, legal fees, etc.) can entail substantial costs, causing inefficiency. Producer surplus is significant due to lack of competition, consumer surplus may be minimized. This market structure will not contribute to a fair income distribution of our society.