00:01
All right, so here on this problem, we would like to discuss the inefficiencies that result from monopolies, and then the inefficiencies that result from monopolistic competition.
00:08
So let us begin with monopolies here.
00:13
I'm going to begin with monopolies.
00:15
Now, a few different things to discuss here with monopolies themselves.
00:22
Okay.
00:22
Now, a lot of times whenever you're talking about the inefficiencies of monopolies, you'll hear people complaining that's too high of a price.
00:30
Okay, and there's a validity to that.
00:32
But there's also other inefficiencies that economists like to discuss.
00:39
The main one that we discuss, especially from an economist side, is that monopolies do not supply enough output to be allocatively efficient.
00:52
Do not supply enough output to be allocatively efficient.
01:15
Okay.
01:15
And so here's what this means.
01:16
Allocative efficiency is when the economic concept is the economic concept that regards efficiency, at the social or the societal level.
01:25
Now, what this means here is that there is more demand than what the monopoly is capable of producing.
01:33
Consumers suffer from monopoly because it will sell a lower quantity in the market at a higher price than it would have in a perfectly competitive market.
01:41
So it sells less at a higher price.
01:52
Demand outstrips supply.
01:54
Demand outpaces supply here.
01:57
One example was at &t in the 80s.
02:06
You may not remember it because i don't remember it either.
02:09
I just know from studying that there was a time when at &t provided all of the local and long -distance phone services in the united states.
02:16
It also manufactured most of the phone equipment.
02:19
And so as a result, plans and types of phones and all of those types of things didn't change much...