Consumers lose when a market is served by a monopolist to the extent that units of output for which the price consumers are willing to pay exceeds the marginal costs of production are not produced.

Question

Quizplus · Accepted Answer

When a market is served by a monopolist, the monopolist sets a price above the marginal cost of production, causing a reduction in output and efficiency. This means that some units of output that consumers are willing to buy are not produced, resulting in consumer welfare loss. Therefore, consumers lose when a market is served by a monopolist.

Consumers Lose When a Market Is Served by a Monopolist