Welfare Loss from Monopoly - A Level and IB Economics

​This revision video looks at the welfare loss associated with firms using their market power to price above marginal and average cost.

Firms with monopoly power can setprice well above marginal and average cost and achieve high supernormal profits. Higher prices can lead to a deadweight loss of economic welfare because it restricts output and can also lead to an increase in inequality. This is a cause of market failure.

#aqaeconomics #ibeconomics #edexceleconomics