AL F.6 Econ Why monopoly pricingsaid to be econ waste?

Monopoly pricing is econ waste or inefficient ---- because there is a dead-weight loss.

Efficient in pricing (P) - Marginal Revenue (MR) equal to Marginal Cost (MC). At a perfect information market, everyone get information without difficulty. Price is constant and therefore the MR is constant and same. They will do business until their own MR (or P) is equal to their MC. Therefore, MR = MC = P.

But in Monopoly, she will also do business until MR = MC. But the P is not the same as a perfect information market. The P in monopoly is downward sloping, which will make MR downward sloping at a higher degree. Monopoly will stop business at MR = MC, but the price is higher than MR. There is a difference between P and MR (MC) and we call it dead-weight loss, which cannot be captured by all parties and wastes economic resources.

In a conclusion, Monopoly is inefficent because the loss exists.