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Unformatted text preview: accumulation of wealth – isn’t good to wealth there are restricted outputs and higher prices PAY ATTENTION TO THE INEFFICIENT RESOURCE ALLOCATION AND MARGINAL ANALYSIS!! Marginal Utility is greater than Marginal cost we under produce, the exception is natural monopolies price is less than marginal cost, so that we have to raise production KNOW THE GRAPH ON PAGE 140! IT WILL BE ON A TEST! not many good things about a monopoly. there are a few things that could be good… may shift demand to right through advertising efforts and thus expand output or production. may shift cost curves downward due to economies of scale. since a natural monopoly may have lower costs that an industry composted of many smaller firms, prices may be competitive may aid innovation by investing in Research and development monopoly is a price maker as compared to Perfect competition’s price taker inefficient resource allocation too little output and too high of price...
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- Spring '08
- Economics, #, 17 years, inefficient resource allocation, inefficient Monopolies accumulation