(Scenario: Home Monopolist) A monopolist faces a demand curve given by P = 60 - 2Q and has total costs given by TC = Q². Its marginal revenue is MR = 60 - 4Q and its marginal cost is MC = 2Q. Compared with the no-trade equilibrium, consumer surplus ___________ when the monopolist engages in free trade.

Question

Quizplus · Accepted Answer

When the monopolist engages in free trade, it typically faces more competition, which can lead to lower prices and higher quantities sold. This generally increases consumer surplus as consumers benefit from lower prices and more available goods.

(Scenario: Home Monopolist) a Monopolist Faces a Demand Curve Given