Topic 15: What is a Monopoly

The three main characteristics that make a firm a monopoly are only one seller, producing an unique product, and having barrier to entry. The quantity a firm produced is at where the marginal cost and the marginal revenue intersect. The price of the output will be the demand at that same quantity. The costs of the monopolist are just the costs of the production and the benefit of the monopolist are the profit earned from every output they sell. The costs to the society is the consumer surplus that is lost in the monopoly market. One commentator mentions that one of the problem with monopoly is that it transfer income away from consumer to themselves, but economists are not concerned with this. Economists are concerned about inefficiency. Economists encourage monopoly that developed from efficiency.  I agree with there concerned. An efficient firm is very important. It uses its resources to produce most of it. Monopoly can be good in a sense that if average cost is decreasing output, then large scale manufacture in production. I think it is not worth a try to attain a monopoly, because although monopoly is very inefficient. The surpluses are not maximized and deadweight loss occur.