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Author Question: Compared to a competitive market, a single-price monopoly decreases the consumer surplus and ... (Read 164 times)

appyboo

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on: Jun 29, 2018
Compared to a competitive market, a single-price monopoly decreases the consumer surplus and increases the economic profit. Is the previous statement correct or incorrect? Explain your answer.
 
  What will be an ideal response?

Question 2

What relationship is shown by a demand curve?
 
  What will be an ideal response?


sarahccccc

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The statement is correct. A single-price monopoly produces less than a competitive market and sets a higher price, both of which decrease the consumer surplus but increase the economic profit.

Answer to Question 2

The demand curve shows the relationship between price and quantity demanded. Since price and quantity demanded are inversely related, the demand curve is downward sloping.


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