For the same demand and cost conditions,which of the following is true?
A)Consumer surplus and producer surplus are both lesser in a monopoly market compared to perfect competition.
B)Consumer surplus is lesser but producer surplus is greater in a monopoly market compared to perfect competition.
C)Consumer surplus is greater and producer surplus is lesser in a monopoly market compared to perfect competition.
D)Consumer surplus and producer surplus are both greater in perfect competition than in a monopoly.

Question

Quizplus · Accepted Answer

In a monopoly market, the monopolist can set prices above marginal costs, leading to a higher producer surplus but a lower consumer surplus compared to perfect competition, where prices are closer to marginal costs.

For the Same Demand and Cost Conditions,which of the Following