The transfer to monopoly of a portion of _______ is a(n) _______ issue.
A) output; equity
B) consumer surplus; efficiency
C) consumer surplus; equity
D) economic profit; consumer surplus and efficiency

Question

Quizplus · Accepted Answer

When a monopoly emerges, it often reduces the consumer surplus, which is the difference between what consumers are willing to pay and what they actually pay. This transfer from consumers to the monopolist is an equity issue because it affects the distribution of resources and income. Option A is incorrect because output is a measure of efficiency, but it is not directly linked to monopoly transfer. Option B is incorrect because monopoly transfer affects consumer surplus, but it does not necessarily impact efficiency. Option D is incorrect because economic profit is not a particular issue related to monopoly transfer.

The Transfer to Monopoly of a Portion of _______ Is