Compared to a similar perfectly competitive industry, a single-price monopoly
A) creates a deadweight loss and decreases economic profit.
B) produces more output.
C) creates a deadweight loss and decreases consumer surplus.
D) is more efficient because there is no wasteful competition.

Question

Quizplus · Accepted Answer

A single-price monopoly creates a deadweight loss because it restricts output to raise prices, leading to a loss of consumer and producer surplus. It also decreases consumer surplus as consumers pay higher prices for fewer goods.

Compared to a Similar Perfectly Competitive Industry, a Single-Price Monopoly