Measuring the Net Welfare Loss Due to Monopoly | Markets
We shall now try to measure the net welfare loss due to monopoly or inefficiency of monopoly. In Fig. 11.20, the price-output solution under perfect competition is Ec (pc, qc) and that under monopoly is Em (pm, qm). The level of output of the perfectly competitive industry is the efficient level of output because here the willingness to pay for [...]