Module 29-30 - -Many(if not most monopolists Fnd that they...

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Module 29/30 – Microeconomics Welfare Effects of Monopoly - By reducing output and raising price above marginal cost, a monopolist captures some of the consumer surplus as profit and causes deadweight loss. - To avoid deadweight loss, government policy attempts to prevent monopoly behavior. Price Discrimination - Up to this point we have considered only the case of a single-price monopolist, one who charges all consumers the same price. - Not all monopolists do this.
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Unformatted text preview: -Many (if not most) monopolists Fnd that they can increase their proFts by charging di±erent customers di±erent process for the same good.-They engage in price discrimination. -Ex: Airline Tickets o If you are willing to buy a nonrefundable ticket a month in advance and stay over a Saturday night, the round trip may cost only $150, but if you have to go on a business trip tomorrow and come back the next day, the round trip might cost $550....
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