February 2016
Beginner to intermediate
500 pages
33h 40m
English
Unlike perfect competition, which achieves economic efficiency—that is, maximizes total surplus, [&TS (|eq| ~rom~consumer surplus|+|producer surplus|=|~normal~CS|+|PS)~norm~&]—a profit-maximizing monopoly is economically inefficient because it wastes potential surplus, resulting in a deadweight loss. The inefficiency of monopoly pricing is an example of a market failure: a non-optimal allocation of goods and services such that a market does not achieve economic efficiency. Market failure often occurs because the price differs from the marginal cost, as with a monopoly. This economic inefficiency creates a rationale for governments to intervene, which ...