![]() The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It remembers which server had delivered the last page on to the browser. This cookie is used to assign the user to a specific server, thus to provide a improved and faster server time. It also helps in not showing the cookie consent box upon re-entry to the website. This cookie is used to check the status whether the user has accepted the cookie consent box. The cookie is used to store the user consent for the cookies in the category "Performance". This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. The cookies is used to store the user consent for the cookies in the category "Necessary". The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". The cookie is used to store the user consent for the cookies in the category "Analytics". The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Advertisement". ![]() ![]() Amazon has updated the ALB and CLB so that customers can continue to use the CORS request with stickness. This cookie is used for load balancing services provded by Amazon inorder to optimize the user experience. It does not correspond to any user ID in the web application and does not store any personally identifiable information. The cookie is used by cdn services like CloudFlare to identify individual clients behind a shared IP address and apply security settings on a per-client basis. These cookies ensure basic functionalities and security features of the website, anonymously. Necessary cookies are absolutely essential for the website to function properly. ![]() Monopoly – advantages and disadvantages.Monopolistic competition – where the short-run equilibrium is different from the long-run equilibrium.A monopoly can produce more and have lower average costs. In a competitive market, firms may produce quantity Q2 and have average costs of AC2. It is assumed monopolies have a degree of economies of scale, which enables them to benefit from lower long-run average costs. The blue triangle shows the net loss of consumer and producer surplus to society.But, some of the consumer surplus is captured by firms (from setting higher price). Monopoly also causes a fall in producer surplus (less is sold).In a monopoly, the output will be QM and PM – causing a fall in consumer surplus.In a competitive market, the output will be at Pc and Qc.With less competition, a monopoly has fewer incentives to cut costs and therefore will be x-inefficient.By producing at Qm, the monopoly is productively inefficient (not lowest point on AC curve).Monopolies set a price greater than MC which is allocatively inefficient.However in the long-run in monopoly prices and profits can remain high.Therefore, in the long-run in competitive markets, prices will fall and profits will fall.In competitive markets barriers to entry and low – so new firms can enter the market causing lower profit.In monopolies, there are barriers to entry – which prevent new firms from entering the market.In the short run, firms in competitive markets and monopolies could make supernormal profit. Usually, supernormal profit attracts new firms to enter the market, but there are barriers to entry in monopoly, and this enables the monopoly to keep supernormal profits.ĭifference between monopoly and competitive markets in the long-run.This diagram shows how a monopoly is able to make supernormal profits because the price (AR) is greater than AC.Profit maximisation occurs where MR=MC.The diagram for a monopoly is generally considered to be the same in the short run as well as the long run. Readers Question: Explain with the help of diagrams the equilibrium of a firm having monopoly power in the market in the short-run and long-run?
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