Consumer surplus tends to be larger in a monopolized market than a competitive one.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between what consumers are willing to pay for a product and what they actually pay. In a competitive market, there is more competition among sellers, which drives prices down and increases consumer surplus. In a monopolized market, the monopolist has more control over prices and can charge a higher price, leading to a lower consumer surplus. Therefore, consumer surplus tends to be larger in a competitive market than a monopolized one.

Consumer Surplus Tends to Be Larger in a Monopolized Market