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Market Failure & Monopolies - Economics Presentation
Transcript of Market Failure & Monopolies - Economics Presentation
The market, which has not achieved and efficient allocation of resources would end up with an outcome which is not Pareto Optimal- where one individual is made better off by making another worse off - but instead Pareto improvement - where one individual is made off without making at least one person worse off Monopolies Market Failure Why it causes Market Failure ? Market Failure can arise from Monopolies due to the inability to self regulate the actions of the Monopolies , this is called Monopoly Power. Benefits and Costs
Monopolies Costs from Monopolies Ways to Correct
Monopoly Power How to Correct Monopoly Power Price Control You Michelle Magallon
12C~ Thank Monopolies that gain foothold in their markets, create barriers which make other firms unable to enter the market. This makes it impossible for the price mechanism to work and it also causes the inability to allocate resources where they are most needed Less Choice
High Selling Price
Benefits from Monopolies Dynamic Efficiency
Exploit of Economies of Scale
Avoidance of Duplication of Infrastructure Prohibition of Mergers Breaking up Monopolies Nationalization & Deregulation