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The firms that produce gas have considerable market power and hence are typically considered to be monopolies. Monopoly firms are unchecked by competition and, therefore,

The firms that produce gas have considerable market power and hence are typically considered to be monopolies. Monopoly firms are unchecked by competition and, therefore, the outcome in a monopoly market is often not in the best interest of society. The following question requires you to consider the welfare implications of a monopoly. Draw a full-labelled diagram of a monopoly firm earning an economic profit. Show the firm's profit- maximising price and output, consumer surplus and producer surplus and deadweight loss.

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