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Suppose that many small identical firms decide to join and make one large firm. Assume that this joining does not affect their costs. Graphically show
Suppose that many small identical firms decide to join and make one large firm. Assume that this joining does not affect their costs. Graphically show how level of output and price differ between the many small firms and the single large firm acting as a monopoly.Show how consumer and producer surplus in the competitive industry differ from consumer and producer surplus in the monopoly industry.Briefly explain why economists believe that a monopoly industry is inefficient?
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