MONOPOLY AND EFFICIENCY: A monopoly firm generally produces less output and chargers a higher price than would be the case for a perfectly competitive industry. In particular, the price charged by a monopoly is not equal to (in fact, higher than) the marginal cost of production. The equality between price and marginal cost is THE key indication that resources are allocated efficiently and that society's resources are being used to generate the highest possible level of satisfaction. See also | monopoly | market control | marginal cost | demand curve | market failure | monopoly characteristics | monopoly and demand | monopoly profit | monopoly and perfect competition | inefficiency |
