Industry supply is the sum of the supply curves of all the individual firms. If firms exit an industry, the industry supply curve shifts leftward. Allocative efficiency occurs when total social cost equals total social benefit. Patents create monopolies by restricting demand. If the elasticity of demand is less than 1, a monopoly's total revenue increases when price decreases.
Monopolies often earn positive economic profit because they receive government subsidies.
An unregulated monopolist will lower price when fixed costs fall marginal costs fall. Because of differing elasticities of demand. A price discriminating monopolist charges lower prices to customers with lower quantities demanded. Producer surplus is total revenue less opportunity costs. Compared to a competitive industry, a monopoly transfers deadweight loss to consumers.