Economists criticize monopolies because monopolies

Question

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Economists criticize monopolies because they restrict output and raise prices compared to a competitive situation. This reduces consumer surplus and allocative efficiency. Monopolies also have the ability to earn economic profits due to their power to set prices above marginal cost, resulting in a misallocation of resources. However, not all monopolies engage in price discrimination or make consumers pay more than the value they place on the product.

Economists Criticize Monopolies Because Monopolies