In comparison to perfect competition, monopoly price-quantity combinations generate
A)a consumer surplus that is larger.
B)a producer surplus that is smaller.
C)total revenue to the producer that is larger.
D)a reduction in deadweight loss.

Question

Quizplus · Accepted Answer

In a monopoly, the price is typically higher and the quantity produced is lower than in perfect competition, leading to larger total revenue for the producer. Monopolies have the market power to set prices above marginal costs, unlike in perfect competition where prices equal marginal costs, resulting in increased revenue for the monopolist.

In Comparison to Perfect Competition, Monopoly Price-Quantity Combinations Generate