3 ms·
Monopolies earn their economic profits by raising prices beyond what a free market would charge, which suppresses supply, reducing the quantity produced below t
by sclarisse 4y ago
Monopolies earn their economic profits by raising prices beyond what a free market would charge, which suppresses supply, reducing the quantity produced below the efficient amount. That does reduce (real) GDP.
(You might measure it wrong and end up with an increase to GDP if it’s not in your market basket.)
- hervature 4y agoYou raise a good point. I will have to think about this but my gut says that it would demand on the elasticities and probably only true in some linear version of supply and demand curves.