Monopoly and Public Policy

7 Pages Posted: 12 Oct 2014

See all articles by Magdalena Laskowska

Magdalena Laskowska

Université Paris II - Panthéon-Assas

Date Written: 2014

Abstract

A monopolist, the sole producer of a good or a service that has no close substitutes, can establish its prices itself. Such prices are higher than those that would result from free competition, but they do not rise without any limit. There is a restraint on market power: consumer demand decreases if a price increases. A monopolist can choose, for the same level of profits, to produce a large quantity of goods to be sold at low prices or a small quantity of goods to be sold at high prices. Monopolies tend to pose severe economic problems, and in this article I address some of the challenges posed by monopoly to public policy.

Keywords: monopoly, market power, public policy

Suggested Citation

Laskowska, Magdalena, Monopoly and Public Policy (2014). Available at SSRN: https://ssrn.com/abstract=2507273 or http://dx.doi.org/10.2139/ssrn.2507273

Magdalena Laskowska (Contact Author)

Université Paris II - Panthéon-Assas ( email )

12 place du Pantheon
Paris cedex 06, 75231
France

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