Concept
Version 7
Created by Boundless
Reasons for Efficiency Loss
Imperfect competition
This graph shows the short run equilibrium for a monopoly. The gray box illustrates the abnormal profit, although the firm could easily be losing money. A monopoly is an imperfect market that restricts the output in an attempt to maximize its profits.
Source
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"Imperfect competition in the short run."
http://commons.wikimedia.org/wiki/File:Imperfect_competition_in_the_short_run.svg
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