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PaperclipPerfector  9mo ago (text post)   3314 thread views

Friday Fun Thread for March 22, 2024

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I think you could get there from a normal supply/demand relation, since efficiency raises supply?

Monopolists don't set prices to where supply = demand, they set prices to maximize their own profit, and there's deadweight loss because of the mismatch. But, yeah, prices would still decrease as efficiency increased. I think it gets weird when there are very large price differences involved and it'd depend on what the demand curve looks like exactly. My argument is more that we can observe competition driving the price decreases of all those specific goods historically.

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