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Monopoly and Public Policy

Module. Micro: Econ:. 26. 62. Monopoly and Public Policy. KRUGMAN'S MICROECONOMICS for AP*. Margaret Ray and David Anderson. What you will learn in this Module :. The effects of monopoly on society’s welfare. How policy-makers address the problems posed by monopoly.

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Monopoly and Public Policy

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  1. Module Micro: Econ: 26 62 Monopoly and Public Policy • KRUGMAN'S • MICROECONOMICS for AP* Margaret Ray and David Anderson

  2. What you will learnin thisModule: • The effects of monopoly on society’s welfare. • How policy-makers address the problems posed by monopoly.

  3. What you will learnin thisModule: • The purpose of this module is to show that, when compared to perfect competition, the existence of monopoly reduces output and raises prices to consumers, while earning economic profit for the firm. By producing at an output below that where P=MC, monopoly causes a loss of total welfare: deadweight loss. In order to mitigate the negative consequences for consumers, government can adopt policies to regulate a monopoly firm.

  4. The Welfare Effects of a Monopoly

  5. Preventing Monopoly Power Antitrust Laws address monopolization in markets (Antitrust laws are discussed in more detail in the modules dealing with oligopoly) Brian Smith/Zuma Press

  6. Dealing With A Natural Monopoly • Public ownership • Price regulation

  7. Price Regulation

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