A few questions for AC's

[ianlippert]

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Their cost structures are inherently more efficient. That doesnt insulate a poorly run monopoly from bloat or the introduction of other inefficiencies. However, in an AC vs statist argument issues of a monopolist's bloat are relevant only if they are endemic and unavoidable. The cost inefficiencies I mentioned (among others Im sure) ARE endemic to competition and unavoidable, so a perfectly efficient monopoly must be more cost efficient than a pefectly efficient and succesful competitor.


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Do you have any examples of efficient monopolies? I find it hard to believe that a monopoly could be that much more efficient than the free market. Its kind of like the socialist problem with calculation, a monopoly is never going to be able to find the efficient point on the S&D curve. Competition not only causes competitors to to produce the most products at the lowest prices, it forces competitors to constantly create new technologies to outcompete each other. So a monopoly may be able to come into an established market, produce at the most efficient point and reduce all the overhead and produce more in the short run, but it will soon lose in the long run due to the stagnation of its technology. They can only produce at the most efficient point in the market because the free market has already discovered the most efficient point of production. Without free markets I'd argue its impossible for a monopoly to be more efficient. But I'd be interested in any contrary examples.