U.S. Department
of Justice
Monopoly Pricing, Superimposed Over The Economic Demand Curve
| Graph representing monopoly pricing, superimposed over the economic demand curve. The monopoly price occurs where the monopolist's cost curve intersects with its marginal revenue curve. This graph demonstrates that such monopoly pricing, as opposed to competitive pricing, can result in a higher price and a smaller area of consumer surplus. A portion of consumer surplus is transferred to the monopolist, and another portion is simply lost -- this lost portion is labeled "deadweight loss." |
Updated July 5, 2024