In comparison with a perfect competition, a single-price monopolist with the same costs creates a ________ consumer surplus and makes a ________ economic profit.
A) smaller; larger
B) smaller; smaller
C) larger; larger
D) larger; smaller

Question

Quizplus · Accepted Answer

A single-price monopolist reduces consumer surplus by charging a higher price and restricting output compared to perfect competition, leading to a smaller consumer surplus. The monopolist can earn a larger economic profit due to its ability to set prices above marginal cost.

In Comparison with a Perfect Competition, a Single-Price Monopolist with the Same