Monopoly
Files
Description
Because a monopolist, a single seller, can set the price of its product or service with limited restraints from competition, it has an incentive to sell a smaller quantity at a higher price than would be the case if the market were competitive. As a result, monopoly will harm consumers and impose a cost on society (a) because those that do buy the product or service will pay more than they would if the market were competitive and (b) because some consumers who would buy at a competitive price will choose not to buy the product or service at the higher monopoly price. Monopsony, a single buyer, similarly harms sellers and imposes costs on society because the monopsonist has an incentive to purchase a smaller quantity at a lower price than in a competitive market.
First Page
80
DOI
https://doi.org/10.4337/9781802200546.00019
Source Publication
Elgar Encyclopedia on the Economics of Competition, Regulation and Antitrust
Source Editors/Authors
Michael D. Noel
Publication Date
12-31-2024
Publisher
Edward Elgar Publishing
Recommended Citation
Bret Dickey & Daniel L. Rubinfeld,
Monopoly,
Elgar Encyclopedia on the Economics of Competition, Regulation and Antitrust
80
(2024).
Available at:
https://gretchen.law.nyu.edu/fac-chapt/2142
