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Homework answers / question archive / Because monopoly firms do not have to compete with other firms, the outcome in a market with a monopoly: a
Because monopoly firms do not have to compete with other firms, the outcome in a market with a monopoly:
a. is efficient
b. is often not in the best interest of society
c. maximizes total economic well-being
d. benefits consumers more so than the producer
The answer is b).
The outcome in a monopoly is not socially optimal, because the monopolist tends to produce less than what is produced in a competitive market. Therefore, the total surplus in a monopolist is less than the total surplus in a competitive market. Therefore, the monopolist outcome is not in the best interest of the society.
