(Not sure If this question is suited for here or it should be asked at money or law SE)

As the title reads, Does any specific economic inefficiency arises when someone corners or tries to corner a market e.g. a commodity like silver?

My limited knowledge as a economics undergraduate student tells me that if the cornering leads to higher demand, then in a perfect market that would lead to a increase in supply (and the price could go up or down or stay flat depending on the industry costs).

For cases when perfect competition is not present or the supply is already limited (like precious metals) I can't be sure what could go wrong other than that the party who cornered the market can establish a monopoly on supply now.


1 Answer 1


You already have your answer in the last sentence. A monopoly can be established and that leads to well known "bad" economic consequences, i.e. economic inefficiencies.


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