Pollution, and other negative externalities, cause firms to produce too much of their product.
...if you fail to account for corporate reputations and government regulation.
The equilibrium behaviour for monopolies is to produce too little of their product, to keep prices and profits high.
That’s why real economeis typically feature a Monopolies and Mergers Commission, or similar organization.
...if you fail to account for corporate reputations and government regulation.
That’s why real economeis typically feature a Monopolies and Mergers Commission, or similar organization.