When an Industry Becomes Monopolized

question 212

Multiple Choice

When an industry becomes monopolized:

• A) the gains to the monopolist are typically greater than the losses to consumers.
• B) the losses to consumers are typically greater than the gains to the monopolist.
• C) the gains to the monopolist are exactly the same amount as the losses to consumers.
• D) both the monopolist and consumers gain.

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Definitions:

Total Surplus

The sum of consumer surplus and producer surplus, representing the total net benefit to society from the production and consumption of a good or service.

Cost-Benefit Analysis

An economic evaluation method that compares the relative costs and benefits associated with a proposed project or decision.

Opportunity Cost

The worth of the best alternative given up when a decision is made.

Cost-Benefit Analysis

An evaluation process that compares the costs and benefits of a decision or project to determine its feasibility or worth.