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Overall, the monopolisation of a perfectly competitive market can be expected to reduce total welfare. Under perfect competition, the supply curve represents the sum of the individual firms' marginal cost...

Price Elasticity of Demand (PED) measures the responsiveness of the quantity consumers demand in relation to price changes. In simple terms, when the price increases, demand for the product decreases. The...

The government could use monetary policy, which is the government’s use of interest rates and other monetary tools to control the money supply. For example, the government could lower interest rates. This...

There are a few reasons for which monopolies are, in certain cases, both desirable and beneficial. The first case to consider is that of a natural monopoly, which benefits from Economies of Scale (show th...

To begin with, the main difference between subsidies and price ceilings is that subsidies move the market equilibrium as they shift supply outwards (show on a diagram), which occurs because producers now ...