The existence of a monopoly:
A) creates a gain of total surplus.
B) benefits the consumer.
C) benefits the monopolist.
D) creates more consumer surplus.

Question

Quizplus · Accepted Answer

A monopoly benefits the monopolist, as they have control over prices and can generate higher profits than in a competitive market. This can lead to inefficiencies and reduced consumer surplus. While monopolies may create some gains in total surplus, these gains are likely outweighed by the negative effects on consumer welfare.

The Existence of a Monopoly