A History of Microsoft's AntiCompetitive Behavior

[Squilliam]

alephnull said:

Squilliam said:

I think that generally where a company has market power they will act against the best interests of the consumer and attempt to derive a much higher producer surplus than they could get otherwise.

Under orthodox models, monopolists will price above the point where MC=MR as you say. However, you have to be the first I've encountered to say this is in the interest of consumers. Usually the argument from classical liberals is that monopolies are impossible to maintain for a significant period without state interference.

Its not as simple as classical liberals like to think. Some markets by their very nature are more efficiently organised in a monopolistic kind of way. Consider situations like Cable companies, power line companies, Cell phone providers where each for a variety of reasons find a natural equilibrium in a monopolistic state. In these situations the market is better provided for by a monopoly as long as the excessive economic rents taken by these companies are held in check.