A monopoly market generally fails to maximise total economic wellbeing as it can set higher prices and restrict output, resulting in a deadweight loss and a reduced level of consumer surplus. Additionally, the lack of competition may lead to a decrease in innovation and efficiency, which can distort the allocation of resources and harm overall economic welfare.

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A Monopoly Market

Question 99

Multiple Choice

A monopoly market:

A) generally fails to maximise total economic wellbeing
B) always maximises total economic wellbeing
C) always minimises consumer surplus
D) generally fails to maximise producer surplus

Correct Answer: