HOW SERIOUS IS THE PROBLEM OF MONOPOLY?

This paper provides a survey of literature for the welfare losses due to monopoly. Since 1954 economists have been trying to measure the social costs of monopolies by using different estimation techniques. The measure most frequently used to calculate the welfare losses has been consumer surplus. In 1950s and 1960s monopoly was not thought to be a big problem. The estimations showed that it only generated a loss equal to 1% of GNP. However, in 1970s and 1980s this thought has changed, and it has been accepted that monopolies are a real bad.