The Burden of Monopoly

摘要: A MEASUREMENT of the effect monopoly on price such as I have reported earlier in this Journal' is interesting for its implications income distribution and resource allocation. The total transfers attributable to sum profits, shown that small.2 allocation effects are subject note. So far, only A. C. Harberger has estimated extent misallocation due resulting welfare loss. Applying Hotelling's model, monopolistic 1953 at $4.6 billion loss $225 million.' These numbers not large. George J. Stigler criticized Harberger's method estimating profits also assumption concerning elasticity demand industries which he used calculating reductions output result from monopoly.4 Accordingly, shall apply same but substitute my own estimate Harberger's, assume a range reasonable values demand.