High prices charged by monopolists will cause themonopolists':

Question

Quizplus · Accepted Answer

Monopolists have the ability to charge higher prices as they have no competition. This reduces consumer surplus and can result in a decrease in total surplus. The gains of the monopolist in terms of increased profits from higher prices will be less than the losses incurred by consumers due to higher prices. This is because the decrease in quantity sold due to higher prices will reduce total revenue for the monopolist, offsetting some of their gains. Therefore, the gains of the monopolist will be less than the losses experienced by consumers.

High Prices Charged by Monopolists Will Cause Themonopolists