Effect of Subsidy on Monopoly (With Diagram)
In this article we will discuss about the effect of subsidy on monopoly. In the case of a monopoly, the profit is given by the difference between the total revenue, R(q), and the total cost, C(q), where q is the output quantity produced and sold by the monopolist. Thus, the pre-subsidy profit function of the monopolist is π1 = R(q) [...]