00:01
Hello, soutu, i'm going to answer your question about inefficiencies in monopolistic markets.
00:07
For doing so, first i sketch a supply and demand curve.
00:11
In your case, i'm just going to use this for show you the productions.
00:15
In the vertical axis, you will see the price, and in the horizontal axis the quantity.
00:22
The first line that you are going to see is the demand.
00:25
That is this line i'm just going to highlight it, even though i also tag them.
00:31
So for you is easier if you want to check them.
00:33
Afterwards this is the demand this will be the marginal cost the sorry the marginal revenue this will be the marginal cost and this will be the average total cost as you can see normally you will select the price when where the average total cost is the lower right that's the price when you have a competitive market but in this case you select the price the quantity that you are going to produce where the marginal cost crosses the marginal revenue at this point, but the demand have this price for that specific quantity.
01:10
So you are paying this price...