In comparison with perfect competition, a single- price monopolist with the same costs creates a _______ consumer surplus and makes a _______ economic profit.
A) larger; larger
B) smaller; smaller
C) larger; smaller
D) smaller; larger

Question

Quizplus · Accepted Answer

In comparison with perfect competition, a single-price monopolist creates a smaller consumer surplus because it reduces the quantity supplied to increase prices. This leads to a larger economic profit for the monopolist because they can charge higher prices than in a perfectly competitive market.

In Comparison with Perfect Competition, a Single- Price Monopolist with the Same