Suppose that many similar price-taking consumers have a single good (candy bars). Jane has a monopoly in wood, so she can set prices. Assume that no production is possible. Using an Edgeworth box, illustrate the monopoly optimum and show that it does not lie on the contract curve (that is, it isn’t Pareto efficient).
Suppose that many similar price-taking consumers have a single good (candy bars). Jane has a monopoly in wood, so she can set prices. Assume that no…
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