Which of the following is a consequence of a monopoly?
A)An expansion of output beyond the efficient level
B)A redistribution of income from consumers to producers
C)A fall in price below the efficient level
D)An increase in the total surplus in the market

Question

Quizplus · Accepted Answer

A monopoly typically leads to an increase in price and a decrease in output, resulting in a redistribution of income from consumers to producers as producers capture a larger share of the total surplus in the market. Options A and C are incorrect because a monopoly typically produces less than the efficient level of output and charges a higher price than the competitive level. Option D is also incorrect as a monopoly often results in a decrease in total surplus due to the deadweight loss created by the lack of competition.

Which of the Following Is a Consequence of a Monopoly