question archive Compared to a competitive industry, a monopoly transfers A
Compared to a competitive industry, a monopoly transfers A
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Compared to a competitive industry, a monopoly transfers
A. consumer surplus to producers.
B. producer surplus to consumers.
C. deadweight loss away from producers to consumers.
D. deadweight loss away from consumers to producers.
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Answer: A
In a competitive industry, total surplus is maximized. In a monopoly, prices are higher, quantity is lower, and economic profit is positive. This means producer surplus has increased due to the increase in profit and consumer surplus has decreased due to higher prices and lower quantity.
