We begin our discussion in this chapter by examining the various
concepts of efficiency used by economists. This discussion will develop
more fully the concept of efficiency we first saw at the end of Chapter
5.
Our discussion of efficiency will make it clear why economists are
suspicious of monopolistic practices and seek to encourage competitive
behaviour. In the remainder of this chapter we discuss how public policy
deals with the challenges of monopoly and oligopoly in an effort to
improve the efficiency of the economy.