Technology Adoption in Monopoly and Competition

A monopoly is likelier than a perfectly competitive firm to adopt technology that lowers average costs of production, because it can capture more of the gain through higher profits with lower marginal costs and prices, but this may also increase its market power and potential for additional deadweight loss.

A monopolistic producer has no incentive to reduce deadweight loss through advanced technology, since they can already manipulate the market to their advantage.

Either type of firm is equally likely to invest in technology that lowers average costs, as both seek to profit maximize.

Producers in perfect competition are more likely to use efficiency-enhancing technology, since they operate under a constant threat of competition eliminating any profits.