Vertical integation and scale are not inherently monopolistic. Some monopolies formed because they exploited these advantages, but there are competative industries today where several vertically integrated companies compete.
Monopolies in econ 101 are not called inefficient because they extract profit. They’re inefficient because they don’t respond to market forces. Since they control all supply, they can disregard demand.
The profit isn’t what makes the monopoly inefficient, it’s what makes the market inefficient. By absorbing all the excess product it limits the available funds for other products. On top of the fact that a monopolies ability to disregard demand (and maintain high profits)
Vertical integation and scale are not inherently monopolistic. Some monopolies formed because they exploited these advantages, but there are competative industries today where several vertically integrated companies compete.
Monopolies in econ 101 are not called inefficient because they extract profit. They’re inefficient because they don’t respond to market forces. Since they control all supply, they can disregard demand.
Isn’t that what they said?
The profit isn’t what makes the monopoly inefficient, it’s what makes the market inefficient. By absorbing all the excess product it limits the available funds for other products. On top of the fact that a monopolies ability to disregard demand (and maintain high profits)