0
They produce at a different point than a competitive firm, a monopoly produces at a point where marginal revenue= marginal cost, where a competitive firm equates price to marginal cost.
The marginal cost curve is lower than the demand curve, but the monopoly charges the price at the demand curve, which is a higher price and a lower quantity than a competitive market would produce.
Wiki User
∙ 13y ago
Wiki User
∙ 10y agoMonopolies fail to allocate resources efficiently because they produce less than the socially optimal quantity of output and charge prices that exceed marginal cost. There are remedies for this negative factor, much of which is dependent on a governments regulatory policies.
Add your answer:
Earn +20 pts
The equality of P and MC means the firm is achieving?
Allocative efficiency since the industry is producing the amount of product that equates society's valuation of that product and the price of the product.
How does competition in a market affect allocative and productive efficiency?
A competitive market, firms act with their benefit at heart. If a firm is producing at productive efficiency, it produces goods at a relatively low expenditure, it can sell at low prices and hence compete well in the market.
What is meant by an efficient market equilibrium?
When there is allocative and productive efficiency, there is an efficient market equilibrium, allocative efficiency is when the products that are most wanted are produced, this is achieved when price equals marginal cost, productive efficiency is achieved when the firm is producing on the lowest point on the lowest average cost curve, this is also called the point of technical efficiency, both allocative and productive efficiency lead to an optimum allocation of resources and economic efficiency is achieved, though, this is thought to exist only in a perfectly competitive market and is lacking in other markets because monopolies and oligopolies usually have their prices above marginal cost and that is not an efficient allocation of resources and because other markets may lack the incentive to produce at the lowest cost
Who company is monopoly in Pakistan?
pakistan telecommunication company limited is a monopoly firm in pakistan. a monopoly firm is the one which has no competitors.
Dominos fast food firm is a monopolistic firm or not?
it is not a monopoly firm
The equality of P and MC means the firm is achieving?
Allocative efficiency since the industry is producing the amount of product that equates society's valuation of that product and the price of the product.
How does competition in a market affect allocative and productive efficiency?
A competitive market, firms act with their benefit at heart. If a firm is producing at productive efficiency, it produces goods at a relatively low expenditure, it can sell at low prices and hence compete well in the market.
What is meant by an efficient market equilibrium?
When there is allocative and productive efficiency, there is an efficient market equilibrium, allocative efficiency is when the products that are most wanted are produced, this is achieved when price equals marginal cost, productive efficiency is achieved when the firm is producing on the lowest point on the lowest average cost curve, this is also called the point of technical efficiency, both allocative and productive efficiency lead to an optimum allocation of resources and economic efficiency is achieved, though, this is thought to exist only in a perfectly competitive market and is lacking in other markets because monopolies and oligopolies usually have their prices above marginal cost and that is not an efficient allocation of resources and because other markets may lack the incentive to produce at the lowest cost
Who company is monopoly in Pakistan?
pakistan telecommunication company limited is a monopoly firm in pakistan. a monopoly firm is the one which has no competitors.
Dominos fast food firm is a monopolistic firm or not?
it is not a monopoly firm
Is profitability of a firm an adequate measure of its efficiency?
to what extent does profitability of a firm measure its efficiency
How are a monopolistic firm and a competitive firm similar?
Monopoly means that there are no competitor for your product or servises
A firm can achieve equilibrium when its?
a firm can achieve equilibrium when its?
What has the author Harvey Leibenstein written?
Harvey Leibenstein has written: 'Inside the firm' -- subject(s): Competition, imperfect, Competition,Imperfect, Industrial management, Industrial organization (Economic theory) 'Allocative efficiency versus x-efficiency' 'Economic theory and organizational analysis' 'Beyond economic man' 'Inflation, income distribution and X-efficiency theory' -- subject(s): Underdeveloped areas, Inflation, Income distribution
One difference between a perfectly competitive firm and a monopoly is that a perfectly competitive firm produces where -?
perfectly competitive industry become a monopoly， what changes
One difference between a perfectly competitive firm and a monopoly is that a perfectly competitive firm produces where?
perfectly competitive industry become a monopoly， what changes
What is the position of supernormal profits for a firm that is a monopoly?
true
