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+--- Thread: How to determine optimal output and price level? (/thread-51076.html)
How to determine optimal output and price level? - Allie - 12-14-2012 04:00 PM
Plus social welfare in a monopolistic market?
- Mc_Kiernan - 12-14-2012 04:08 PM
Optimal output and price are where marginal cost equals marginal benefit; or, if they can be exactly equal, where they are as close as possible without marginal cost exceeding marginal benefit.
In a monopolistic market, there will be Pareto optimality if the monopolist is a perfect price discriminator (charging each buyer his or her reserve price). Otherwise, there will be a dead-weight loss.