Economics, Econometrics and Finance
4 years ago

Consumers benefit as monopolies set prices based on fixed costs.

MPRA Paper
The theorem of consumer surplus and demand elasticity at equilibrium price in a monopolist competition case
Petr I Grebennikov

Paper Summary

In a market with monopolistic competition, when the price reaches a long-term balance, consumers' extra benefit equals half of the fixed costs, and the price sensitivity is the ratio of total to fixed costs.

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