Microeconomics (Christopher T.S. Ragan) (z-lib.org)

Figure 5-6 Economic Surplus in the Pizza Market Economic Surplus and Market Allocative Efficiency Once the demand and supply cur ...

notable exceptions, private ownership with regulation has been the preferred alternative. Whether the government owns or merely ...

For any quantity of pizzas, the area below the demand curve and above the supply curve shows the economic surplus generated by t ...

Figure 12-8 Pricing Policies for Natural Monopolies Figure 12-8 illustrates a natural monopoly and shows that the firm’s LRAC cu ...

What does this economic surplus represent? The economic surplus is the net value that society as a whole receives by producing a ...

A natural monopoly has falling long-run average costs; marginal-cost pricing leads to losses, whereas average-cost pricing leads ...

the value placed by consumers on additional pizzas is greater than the additional costs associated with their production. Specif ...

Two-Part Tariff One pricing policy that permits the natural monopoly to cover its costs is to allow it to charge a two-part ta ...

1 Any policy that changes the total amount of economic surplus may also create a redistribution surplus between consumers and pr ...

For a natural monopoly with falling average costs, a policy of average-cost pricing will not result in allocative efficiency bec ...

Figure 5-7 Market Inefficiency with Price Controls Market Efficiency and Price Controls At the beginning of this section we aske ...

benefit by having a larger amount of fixed capital allocated to producing this good. A government-owned natural monopoly may be ...

Binding price floors and price ceilings in competitive markets lead to a reduction in overall economic surplus and thus to marke ...

activity highly competitive. Canada Post still has a legislated monopoly over delivery of first-class mail, but this segment of ...

The imposition of a binding price ceiling or price floor in an otherwise free and competitive market leads to market inefficienc ...

wind and solar “farms” producing electricity and selling it into the grid. These technological changes have led to the realizati ...

Figure 5-8 The Inefficiency of Output Quotas One Final Application: Output Quotas Before ending this chapter, it is useful to co ...

find it difficult to correctly draw a diagram like Figure 12-8. In the absence of accurate data, regulators have tended to judge ...

The shaded area shows the reduction in overall economic surplus—the deadweight loss—created by the quota system. The equilibrium ...

Regulation of Oligopolies Governments have also intervened in industries that were oligopolies (rather than natural monopolies), ...