What are the reasons for preferring competition to monopoly?
Monopolists sell at too high a price and provide too small a quantity to be efficient, whereas competitive firms operate efficiently in the long run. Efficiency requires MU = MC. For monopoly, MU = P, as with perfect competition, but P is greater than MC, meaning that MU is greater than marginal cost. This means that an expansion of output will yield utility to consumers that is greater than the cost.
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In the short run, if the stock of capital ________ there will be more depreciation
A) remains stable B) grows C) declines D) grows, declines, or remains stable
The demand for loanable funds curve illustrates
A) the quantity of loanable funds demanded at any given level of disposable income. B) how the quantity of loanable funds demanded changes when the people's expectations about their future income changes. C) how the quantity of loanable funds demanded changes when wealth changes. D) the quantity of loanable funds demanded at any given level of the real interest rate. E) the quantity of loanable funds supplied to the loanable funds market at any given level of disposable income.