![]() | This article is rated Start-class on Wikipedia's
content assessment scale. It is of interest to the following WikiProjects: | ||||||||||
|
The correction suggested below for the first diagram is incorrect. Reference to a "square box" is confusing because as described, the result would not be a square box; it would be a non-square rectangle. Second, the value of marginal cost at the solution (where MR = MC) is not relevant to the determining the Monopoly Profit. Rather, it is the value of Average Total Cost at the solution. (See 3. below.)
1. The ATC Curve should be uniformly converging to the AVC Curve with increases in output. But in the diagram it diverges at higher levels of output.
2. The area intended to show Monopoly Profit is not showing showing it. Instead, it is showing Producer Surplus: (Price minus AVC) times Output.
3. The area showing Monopoly Profit must involve the height of the ATC Curve at the Monopoly Output. That height determines the lower border of the rectangle of interest: (Price minus ATC) times Output.
4. In terms of putting together a diagram to represent a monopoly firm's situation, it is only by coincidence that the minimum value of the ATC Curve falls on the Demand Curve. (These curves have independent origins.) This coincidence makes it easier to compare a hypothetical "competitive" outcome - where Price equals MC - with the monopoly outcome because the Economic Profit at the competitive outcome will be equal to zero. But that does not make it any less of a very special case. (I put "competitive" in quotes because the graph shows significant scale economies (large decreases in ATC), meaning that the market cannot be populated by a large number of price-taking firms. The Output where Price equals MC mimics the property of a competitive market equilibrium that Price will be equal to Marginal Cost for each producer.) While problematic, the indicated Output is nonetheless of interest because it maximizes the sum of profit and consumer surplus. If the ATC Curve in the graph were positioned a little lower, then the output where P=MC would exceed the output where ATC is at its minimum, and there would be positive profits at the "competitive" output, and vice versa.
Producer Surplus is likely to be incorrect (except possibly another "special case").
MGMontini ( talk) 13:10, 20 July 2021 (UTC)
::(e) If you look at the first part of the article no firm can continuously maintain economic profit (by operating where MC>ATC) in a competitive situation! This is because, upon viewing positive economic profits, new firms will enter into the market in order to obtain this economic profit. When this happens, market supply increases and the market price declines. Once again, this the very first under-graduate semester microeconomics 101 class. I've also clearly referred to this in the first part of the article as an introduction. This
Please read Britannica's writing on this subject
[1] and compare to this article. Though Britannica's writing on this subject
[2] may be a little less complete, their statements show your criticism (I've referred to here) as absolutely incorrect; while showing my statements I've made are not incorrect! Please refrain from commenting on subject matter you (and your staff) obviously know nothing about! I will spread the truth on what is happening here if this continues and without proper footnoting! Please stop urges to "correct" cause it makes you feel superior even though you know nothing about the subject matter. You are destroying the credibility of this encyclopedia through your ignorant actions (which people will see for themselves in the long run). Why not read some Economics books before you write anything more. I find the "For Dummies.." books are good in other subject areas (though not comprehensive).
MGMontini (
talk)
13:45, 20 July 2021 (UTC)
References
— Preceding unsigned comment added by Auxilstitute ( talk • contribs) 17:07, 11 November 2014 (UTC)
The chart isn't correct IMO, the profit should be a square box from mc=mr to P@Q
MGMontini ( talk) 17:51, 6 May 2010 (UTC)
Per the error indication above, corrected the jpg picture.
Added relevant Text Book (from College Classes) and other professional sources (published by reputable sources) to the existing text. Corrected the original text to more accurately reflect actual micro economic theory.
Added relevant discussions concerning the limited situations in which Monopolies, and therefore Monopoly Profit, can exist, as well as a discussion as to why there is only a limited number of situations in which a true (1 firm) monopoly can exist in the long run. Indicate the possibility of short-run Monopolies, that become Competitive Markets in the Long Run (see article).
Indicate various Government Laws and methodology used in handling the possibilities of Barriers to Entry and Monopolies. Gave Examples (from text Books - Associated with University/College courses) of each of the situations discussed.
Please send comments if there are any. Thank you.
MGMontini ( talk) 17:51, 6 May 2010 (UTC)
I must admit, I feel rather insulted that the value of the content is listed as "Stub". I feel this is highly unjustified.
Of course the article involves Definition since it simply characterizes the term "Economic Profit". However, in this endeavor, I have covered some of the causes of "Economic Profit", an established explanation as to the (only) possible reasons "Economic Profit" can exist that is predominent throughout the community of Economists. Because Wiki articles must contain legitimate professional and verifiable references (rightly so), I have used a few "beginner's" text books as well as some established "Dictionaries" of Finance and Economics in order to allow any user/reader/verifier to easily verify the validity of the article's content, understand the sources for the content and how the sources' Economic discussions relate to the content, and to easily understand the (many) basic concepts embodied in this article if they go to these "Dictionaries" or any of the "Basic" texts out there. Only one of these Text Books is a more "complex" book; containing mostly the analysis embodied in a mathematical modeling methodology. Again the reason for this is simply to allow the average Wiki user to easily go to "Beginner's" Economic books (even in the "For Dummy" Series) and easily understand related discussions that form the basis for the content, and the additional related discussions that might be extended from this content. The "Complex" book was used here (as a reference/Footnote) because some of the other "Beginner's Texts" could not be used to fully verify some of the content footnoted by the MIT book as being established thought within the community of Economic/Finance Professionals; and the MIT analysis is extremely important in forming a (small but important) portion of the content. In order to ensure this content can be justified to the Editors, and in order to allow this content to explain some important concepts/facts to the less knowledgeable (in this subject) reader, the "Complex" reference was used even though it would be difficult for the average (less knowledgeable) reader of the article to read the source/reference if they so chose. The other sources, and any other similar sources they can find in any library/book store, does allow the average reader to refer to another "source" for this content and completely understand the material in the source and how it relates to the content of the article.
Please understand, any Encyclopedia is not meant to be an "end all" reference and explanation. It is only a relatively brief, comprehensive, understanding of the basic underpinnings of the subject matter, so as to allow the reader enough understanding of the subject matter to either know how to continue a more "in depth" research that should be far more comprehensive in all details, and relevant theoretical and historical matters that relate to the topic, or to provide enough basic understanding of the subject matter so as to allow the reader to converse somewhat intelligently about it and more easily understand any further reading done in the subject matter. An encyclopedia has never been meant to surplant a "Text Book", only to supplement it as a preliminary understanding of many of the "Text book" Extensive and Detailed analysis. Neither does it serve the average reader to have a "text book" detail in an encyclopedia article; for the average user does not want to read an entire (lengthy) text book (chapter) on the subject if they are coming to an encyclopedia. The average user wants a brief and 'comprehensive' description of the relevant ideas concerning the subject matter, so that they have enough to have a 'basic' understanding of the relevant issues, and will only delve into further detail if they truly are interested in doing so, and only into those particular portions of the subject matter they feel they need to research further.
This is why I feel the "Stub" indicator is unwarranted. I feel the content of the article does exactly this. It is not that I feel nothing can possibly be added to improve/expand the article in a good and relevant fashion, but I do feel what has been done already is substantial enough to stand on its own merits if no-one adds to the article. TO indicate the quality is in any way inferior, I believe, is a mistake. I challenge anyone to go to any beginning 'Economics College "Text Book"' to find much more material on this subject matter than is already bwritten in this encyclopedia article. —Preceding
unsigned comment added by
Mgmwki (
talk •
contribs)
17:30, 6 December 2010 (UTC)
As discussed in the Economic Profit section, I believe it was inappropriate to wipe out a separate section on Monopoly Profit since it is a very "different animal" from either "Monopolistic Competition" and "Oligopoly". A separate treatment should be maintained for each type of Market. A Monopoly Market involves Only 1 Seller; and is unique, with very unique characteristics because of this. This forces a separate treatment for Monopolies, as is done in most college text books. I propose we follow the lecture, and written material presentation, accepted in most Accredited Universities.
Please have some knowledge of Economics (this is an Economics Concept) before making changes to this article. Please do not make an attempt to "correct" a cited section; especially if you are not using an accredited source: textbooks from an accredited University
[5], or at least a "For Dummies" or "Teach Yourself..." books from reputable sources. I, other viable contributors, and the readers (looking for accredited and reliable information) will all appreciate if this courtesy is extended.
Please note that everthing in this article has been properly footnoted and has proper citations from the accredited academic and professional literature.
MGMontini (
talk)
17:02, 25 June 2014 (UTC)
Dr. Pappa has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
well drafted
We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.
We believe Dr. Pappa has expertise on the topic of this article, since he has published relevant scholarly research:
![]() | This article is rated Start-class on Wikipedia's
content assessment scale. It is of interest to the following WikiProjects: | ||||||||||
|
The correction suggested below for the first diagram is incorrect. Reference to a "square box" is confusing because as described, the result would not be a square box; it would be a non-square rectangle. Second, the value of marginal cost at the solution (where MR = MC) is not relevant to the determining the Monopoly Profit. Rather, it is the value of Average Total Cost at the solution. (See 3. below.)
1. The ATC Curve should be uniformly converging to the AVC Curve with increases in output. But in the diagram it diverges at higher levels of output.
2. The area intended to show Monopoly Profit is not showing showing it. Instead, it is showing Producer Surplus: (Price minus AVC) times Output.
3. The area showing Monopoly Profit must involve the height of the ATC Curve at the Monopoly Output. That height determines the lower border of the rectangle of interest: (Price minus ATC) times Output.
4. In terms of putting together a diagram to represent a monopoly firm's situation, it is only by coincidence that the minimum value of the ATC Curve falls on the Demand Curve. (These curves have independent origins.) This coincidence makes it easier to compare a hypothetical "competitive" outcome - where Price equals MC - with the monopoly outcome because the Economic Profit at the competitive outcome will be equal to zero. But that does not make it any less of a very special case. (I put "competitive" in quotes because the graph shows significant scale economies (large decreases in ATC), meaning that the market cannot be populated by a large number of price-taking firms. The Output where Price equals MC mimics the property of a competitive market equilibrium that Price will be equal to Marginal Cost for each producer.) While problematic, the indicated Output is nonetheless of interest because it maximizes the sum of profit and consumer surplus. If the ATC Curve in the graph were positioned a little lower, then the output where P=MC would exceed the output where ATC is at its minimum, and there would be positive profits at the "competitive" output, and vice versa.
Producer Surplus is likely to be incorrect (except possibly another "special case").
MGMontini ( talk) 13:10, 20 July 2021 (UTC)
::(e) If you look at the first part of the article no firm can continuously maintain economic profit (by operating where MC>ATC) in a competitive situation! This is because, upon viewing positive economic profits, new firms will enter into the market in order to obtain this economic profit. When this happens, market supply increases and the market price declines. Once again, this the very first under-graduate semester microeconomics 101 class. I've also clearly referred to this in the first part of the article as an introduction. This
Please read Britannica's writing on this subject
[1] and compare to this article. Though Britannica's writing on this subject
[2] may be a little less complete, their statements show your criticism (I've referred to here) as absolutely incorrect; while showing my statements I've made are not incorrect! Please refrain from commenting on subject matter you (and your staff) obviously know nothing about! I will spread the truth on what is happening here if this continues and without proper footnoting! Please stop urges to "correct" cause it makes you feel superior even though you know nothing about the subject matter. You are destroying the credibility of this encyclopedia through your ignorant actions (which people will see for themselves in the long run). Why not read some Economics books before you write anything more. I find the "For Dummies.." books are good in other subject areas (though not comprehensive).
MGMontini (
talk)
13:45, 20 July 2021 (UTC)
References
— Preceding unsigned comment added by Auxilstitute ( talk • contribs) 17:07, 11 November 2014 (UTC)
The chart isn't correct IMO, the profit should be a square box from mc=mr to P@Q
MGMontini ( talk) 17:51, 6 May 2010 (UTC)
Per the error indication above, corrected the jpg picture.
Added relevant Text Book (from College Classes) and other professional sources (published by reputable sources) to the existing text. Corrected the original text to more accurately reflect actual micro economic theory.
Added relevant discussions concerning the limited situations in which Monopolies, and therefore Monopoly Profit, can exist, as well as a discussion as to why there is only a limited number of situations in which a true (1 firm) monopoly can exist in the long run. Indicate the possibility of short-run Monopolies, that become Competitive Markets in the Long Run (see article).
Indicate various Government Laws and methodology used in handling the possibilities of Barriers to Entry and Monopolies. Gave Examples (from text Books - Associated with University/College courses) of each of the situations discussed.
Please send comments if there are any. Thank you.
MGMontini ( talk) 17:51, 6 May 2010 (UTC)
I must admit, I feel rather insulted that the value of the content is listed as "Stub". I feel this is highly unjustified.
Of course the article involves Definition since it simply characterizes the term "Economic Profit". However, in this endeavor, I have covered some of the causes of "Economic Profit", an established explanation as to the (only) possible reasons "Economic Profit" can exist that is predominent throughout the community of Economists. Because Wiki articles must contain legitimate professional and verifiable references (rightly so), I have used a few "beginner's" text books as well as some established "Dictionaries" of Finance and Economics in order to allow any user/reader/verifier to easily verify the validity of the article's content, understand the sources for the content and how the sources' Economic discussions relate to the content, and to easily understand the (many) basic concepts embodied in this article if they go to these "Dictionaries" or any of the "Basic" texts out there. Only one of these Text Books is a more "complex" book; containing mostly the analysis embodied in a mathematical modeling methodology. Again the reason for this is simply to allow the average Wiki user to easily go to "Beginner's" Economic books (even in the "For Dummy" Series) and easily understand related discussions that form the basis for the content, and the additional related discussions that might be extended from this content. The "Complex" book was used here (as a reference/Footnote) because some of the other "Beginner's Texts" could not be used to fully verify some of the content footnoted by the MIT book as being established thought within the community of Economic/Finance Professionals; and the MIT analysis is extremely important in forming a (small but important) portion of the content. In order to ensure this content can be justified to the Editors, and in order to allow this content to explain some important concepts/facts to the less knowledgeable (in this subject) reader, the "Complex" reference was used even though it would be difficult for the average (less knowledgeable) reader of the article to read the source/reference if they so chose. The other sources, and any other similar sources they can find in any library/book store, does allow the average reader to refer to another "source" for this content and completely understand the material in the source and how it relates to the content of the article.
Please understand, any Encyclopedia is not meant to be an "end all" reference and explanation. It is only a relatively brief, comprehensive, understanding of the basic underpinnings of the subject matter, so as to allow the reader enough understanding of the subject matter to either know how to continue a more "in depth" research that should be far more comprehensive in all details, and relevant theoretical and historical matters that relate to the topic, or to provide enough basic understanding of the subject matter so as to allow the reader to converse somewhat intelligently about it and more easily understand any further reading done in the subject matter. An encyclopedia has never been meant to surplant a "Text Book", only to supplement it as a preliminary understanding of many of the "Text book" Extensive and Detailed analysis. Neither does it serve the average reader to have a "text book" detail in an encyclopedia article; for the average user does not want to read an entire (lengthy) text book (chapter) on the subject if they are coming to an encyclopedia. The average user wants a brief and 'comprehensive' description of the relevant ideas concerning the subject matter, so that they have enough to have a 'basic' understanding of the relevant issues, and will only delve into further detail if they truly are interested in doing so, and only into those particular portions of the subject matter they feel they need to research further.
This is why I feel the "Stub" indicator is unwarranted. I feel the content of the article does exactly this. It is not that I feel nothing can possibly be added to improve/expand the article in a good and relevant fashion, but I do feel what has been done already is substantial enough to stand on its own merits if no-one adds to the article. TO indicate the quality is in any way inferior, I believe, is a mistake. I challenge anyone to go to any beginning 'Economics College "Text Book"' to find much more material on this subject matter than is already bwritten in this encyclopedia article. —Preceding
unsigned comment added by
Mgmwki (
talk •
contribs)
17:30, 6 December 2010 (UTC)
As discussed in the Economic Profit section, I believe it was inappropriate to wipe out a separate section on Monopoly Profit since it is a very "different animal" from either "Monopolistic Competition" and "Oligopoly". A separate treatment should be maintained for each type of Market. A Monopoly Market involves Only 1 Seller; and is unique, with very unique characteristics because of this. This forces a separate treatment for Monopolies, as is done in most college text books. I propose we follow the lecture, and written material presentation, accepted in most Accredited Universities.
Please have some knowledge of Economics (this is an Economics Concept) before making changes to this article. Please do not make an attempt to "correct" a cited section; especially if you are not using an accredited source: textbooks from an accredited University
[5], or at least a "For Dummies" or "Teach Yourself..." books from reputable sources. I, other viable contributors, and the readers (looking for accredited and reliable information) will all appreciate if this courtesy is extended.
Please note that everthing in this article has been properly footnoted and has proper citations from the accredited academic and professional literature.
MGMontini (
talk)
17:02, 25 June 2014 (UTC)
Dr. Pappa has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
well drafted
We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.
We believe Dr. Pappa has expertise on the topic of this article, since he has published relevant scholarly research: