When we compare economic welfare in a monopoly market to a competitive market, the profits earned by the monopolist represent?

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Business

Jazmyn Fritz

11 May, 08:13

When we compare economic welfare in a monopoly market to a competitive market, the profits earned by the monopolist represent?

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Cannon Klein · Answer 1

The profits earned by the monopolist represent a transfer of benefits from the consumer to the producer. If the consumer continues to support a monopoly they give very little possibility of competition emerging due to the monopoly having such a huge share of the market. The monopoly holds all the power since the customer relies so heavy on them for their product and the customer does not have many options.