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    How comes a monopolist is X-inefficient?

    How can I draw a diagram to show this for a monopolist?
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    Basically because there's no competition there's 0 incentive to cut costs.
    This is the correct diagram.
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    (Original post by BirdIsWord)
    Basically because there's no competition there's 0 incentive to cut costs.
    This is the correct diagram.
    I've seen it as a single AC diagram, with the cost level at some random point above the curve in google images, but im a bit confused with its understanding
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    (Original post by AmarPatel98)
    I've seen it as a single AC diagram, with the cost level at some random point above the curve in google images, but im a bit confused with its understanding
    As long as your diagram shows actual cost being higher than minimum cost, its correct.
    There are like 4 correct diagrams for it
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    (Original post by BirdIsWord)
    As long as your diagram shows actual cost being higher than minimum cost, its correct.
    There are like 4 correct diagrams for it
    Is it possible to show it on a monopoly diagram instead of just a free standing AC curve?
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    (Original post by AmarPatel98)
    Is it possible to show it on a monopoly diagram instead of just a free standing AC curve?
    Nope.
    You probably technically can but I'd just draw the diagram i attached.
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    (Original post by BirdIsWord)
    Nope.
    You probably technically can but I'd just draw the diagram i attached.
    Cool. Thanks so much!
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    (Original post by BirdIsWord)
    Basically because there's no competition there's 0 incentive to cut costs.
    This is the correct diagram.
    I wouldn't say there is zero incentive to cut costs. As cutting costs still leads to increased profit. Rather I would say that the survival of the firm does not depend on cutting costs and therefore it is not a huge priority.
 
 
 
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