Monopoly and Imperfect Competition
When the market fails to deliver full information to the economic agents, optimality of resource allocation and efficient pricing as determined in the case of perfect competition, cannot hold. Paradoxically in economic theory the same kinds of optimization objective functions are yet adopted. Maximization of profit is still taken as the main objective function even in the case of a lack of full information regarding alternatives open to the economic agent. But demand and supply curves in this case turn out to be differently elastic than the perfectly elastic curves of perfectly competitive markets.
KeywordsDemand Curve Price Discrimination Cost Curve Imperfect Competition Monopoly Price
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