Abstract
Since the estimates are similar to Harberger's, they provide confirmation of Harberger's general conclusion that the welfare loss from monopoly has been small. We have already observed that the income transfers resulting from monopoly are also small in the aggregate. Readers may object to the partial-equilibrium analysis which has been applied in this paper. As prices decline in monopolistic industries, the demand and cost curves may shift. However, the small size of the monopoly sector combined with the small size of the monopoly effect implies that the amount of resources that needs to be moved to achieve competitive prices throughout manufacturing is not large. Hence the changes in the currently competitive sector would be small, and the partial analysis is adequate.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
