When an industry becomes monopolized:
A) the gains to the monopolist are typically greater than the losses to consumers.
B) the losses to consumers are typically greater than the gains to the monopolist.
C) the gains to the monopolist are exactly the same amount as the losses to consumers.
D) both the monopolist and consumers gain.

Question

Quizplus · Accepted Answer

When an industry becomes monopolized, the monopolist has the power to set prices higher than they would be in a competitive market, leading to higher profits for the monopolist but higher prices for consumers. This results in a deadweight loss, meaning that the losses to consumers are typically greater than any gains to the monopolist. Therefore, choice B is the best answer.

When an Industry Becomes Monopolized