Technology Adoption and Welfare under a Monopoly: An Illustration of Microeconomic Policy Analysis
AbstractConventional classroom analysis of technology adoption in a monopoly neglects some important situations. A more comprehensive analysis provides the instructor with opportunities to present some critical economic concepts. By permitting intersecting cost functions, one can show why innovations may be adopted, whether adoption increases welfare, and what relationship exists between quantity, welfare, and adoption. A graph can be used to illustrate the importance of quantity in determining consumer welfare and to illustrate how private and social welfare diverge in a monopoly. A further insight allows comparison of graphical and mathematical approaches to economic analysis.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal The Journal of Economic Education.
Volume (Year): 29 (1998)
Issue (Month): 2 (January)
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Other versions of this item:
- Hennessy, David A., 1998. "Technology Adoption and Welfare Under a Monopoly: An Illustration of Microeconomic Policy Analysis," Staff General Research Papers 1206, Iowa State University, Department of Economics.
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