Answer to Question #108856 in Microeconomics for Yoyo

Question #108856
Monopoly equilibrium is always inferior to perfect competition equilibrium from society ‘s point.
Comment on this statement.
1
Expert's answer
2020-04-10T09:13:49-0400

An equilibrium point is a point where the market clears. I n other words it is the point where the quantity demanded is equal to the quantity supplied in the market. A monopoly is a market structure that is mainly characterized by the existence of one seller and many buyers while the perfect competitive market is a market that is characterized by existence numerous buyers and sellers.

Based on the welfare economics perfect competition equilibrium is superior than the monopoly equilibrium since at at perfect competition equilibrium consumers pay less for commodity and acquire more goods. On the other hand, at monopoly equilibrium consumers pays more and receives fewer goods. Therefore, consumers dig more in their pockets to acquire a good or a service in the monopoly market. Monopoly are able to choose the level of quantity to produce and the also the quality of the product and therefore, monopoly may produce a less quality product that doesn't satisfy the need of consumers or produce in less quantity thereby.


Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS