Long Run Equilibrium Under Monopoly

In general, any industry characterized by monopoly sells less output at higher prices than would the same industry if it were perfectly competitive. From the perspective of the firm and its stockholders, the benefits of monopoly are measured in terms of the economic profits that are possible when competition is reduced or eliminated. From a broader social perspective, these private benefits must be weighed against the costs borne by consumers in the forms of higher prices and reduced availability of desired products. Employees and suppliers also suffer from the reduced employment opportunities associated with lower production in monopoly markets.

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