When a monopoly maximizes profit,the loss of surplus by consumers is _____ the monopolist's gain in profit.
A)less than
B)equal to
C)more than
D)sometimes more than and sometimes less than

Question

Quizplus · Accepted Answer

When a monopoly maximizes profit, the loss of surplus by consumers is more than the monopolist's gain in profit. This is because monopolies often reduce output to increase prices, leading to a deadweight loss in the market where the loss in consumer surplus and potential market efficiency exceeds the gain in producer surplus.

When a Monopoly Maximizes Profit,the Loss of Surplus by Consumers