The economic justification for disdaining monopoly,from a social point of view,is that the monopolist
A) always earns excessive profit.
B) can charge any price he wants.
C) exploits the inelastic nature of demand.
D) produces less than the quantity which maximizes total economic surplus.
E) can treat his consumers with complete indifference.

Question

Quizplus · Accepted Answer

Monopolists have the power to set prices and restrict output, leading to a situation where they produce less than the quantity that would maximize total economic surplus. This results in a loss of societal welfare or deadweight loss, as potential gains from trade are foregone. Therefore, disdaining monopoly is socially justified because it leads to greater economic efficiency and maximization of total economic surplus.

The Economic Justification for Disdaining Monopoly,from a Social Point of View,is