competition producers sell nearly identical products O firms

competition producers sell nearly identical products. O firms minimize total costs 0 firms have price setting power. DQuestion 17 2.5 pts A monopoly market O always maximizes total economic well-being. O always minimizes consumer surplus. O generally fails to maximize total economic well- being. O generally fails to maximize producer surplus. DQuestion 18

Solution

A monopoly market fails to maximize economic well being.  In a monopoly, the price is above marginal cost and the firm earns a positive economic profit. Monopolies produce an equilibrium output where the price of a good is higher, and the quantity lower, and is allocatively inefficient.