Why is the profit-maximising price under monopoly greater than marginal cost? In what way can this be seen as inefficient?
Answer to relevant QuestionsThink of three examples of monopolies (local or national) and consider how contestable their markets are.What is meant by the prisoners’ dilemma game when applied to the behaviour of oligopolists? What will determine the outcome of the game?Why is it difficult to test the assumption that firms seek to maximizelong-run profits?Can taxes be used to relieve poverty?Distinguish between publicly provided goods, public goods and merit goods.
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