Title: Monopoly, Deadweight Loss, and
1Monopoly, Deadweight Loss, and Technical
(Productive) Efficiency
2COST
ATC
PRICE
AVC
MC
ATC
1 FIRM
AVC
MC
OUTPUT
MARKET
PRICE
S
PRICE
D
QUANTITY
3COST
ATC
AVC
MC
ATC
1 FIRM
PRICE
AVC
MC
OUTPUT
MARKET
PRICE
PRICE
D
QUANTITY
4COST
ATC
MC
AVC
PRICE
AVC
OUTPUT
PLANT CAPACITY
5COST
ATC
AVC
MC
ATC
AVC
MC
OUTPUT
6PRICE
DEMAND
COST
REV.
/
ATC
AVC
MC
ATC
AVC
MC
OUTPUT
OUTPUT
MR
7COSTS
P.S.1
P.S.7
ATC1
ATC7
P.S.2
LRAC
ATC2
P.S.3
PRICE
ATC3
P.S.4
P.S.5
ATC4
ATC5
ATC6
OUTPUT
8COSTS
P.S.1
P.S.7
ATC1
ATC7
P.S.2
LRAC
ATC2
P.S.3
ATC3
P.S.4
P.S.5
ATC4
ATC5
ATC6
PRICE
OUTPUT
9COSTS
P.S.1
P.S.7
ATC1
ATC7
P.S.2
LRAC
ATC2
P.S.3
D
ATC3
P.S.4
P.S.5
MR
ATC4
ATC5
ATC6
OUTPUT
10COST
REV.
/
ATC
AVC
MC
PLANT
ATC
SIZE
5
AVC
MC
DEMAND
OUTPUT
MR
11COSTS
P.S.1
P.S.7
ATC1
ATC7
P.S.2
LRAC
ATC2
P.S.3
ATC3
P.S.4
P.S.5
ATC4
ATC5
ATC6
D
MR
OUTPUT
12COST
ATC
AVC
MC
ATC
AVC
MC
OUTPUT
13COST
ATC
ATC
OUTPUT
14COST
ATC
ATC
WITH X INEFFICIENCIES
OUTPUT
15COSTS
LRAC
OUTPUT
16COSTS
LRAC
LRAC
WITH X INEFFICIENCIES
OUTPUT
17S and Marginal Social Cost Pure Competition
PRICE
PRICE
D and Marginal Social Benefit
QUANTITY
18PRICE
S and Marginal Social Cost Pure Competition
PRICE
D and Marginal Social Benefit
MR
QUANTITY
19PRICE
S and Marginal Social Cost Pure Competition
PRICE
D and Marginal Social Benefit
MR
QUANTITY
Ineff.
20S and Marginal Social Cost Pure Competition
MC Mono.
PRICE Pure Comp.
PRICE Mono.
D and Marginal Social Benefit
MR Mono.
QUANTITY
Output Mono.
Output Pure Comp.
Mono. More output and lower price due to lower
MCs resulting from economies of scale
21Or
22PRICE
S and Marginal Social Cost Pure Competition
PRICE
D and Marginal Social Benefit
MR
QUANTITY
Ineff.
23MC Mono.
S and Marginal Social Cost Pure Competition
PRICE Mono.
PRICE Pure Comp.
D and Marginal Social Benefit
MR Mono.
QUANTITY
Output Mono.
Output Pure Comp.
Ineff.
Mono. lower output and higher price due to
higher MCs resulting from X inefficiencies