Asked by Aleyna Akgun on Jul 16, 2024

verifed

Verified

Usually when a monopoly that isn't a natural monopoly is broken up,the losses to the producer outweigh the gains to consumers.

Natural Monopoly

A market structure where a single supplier is most efficient in producing the goods due to high fixed or startup costs, making it unfeasible for new entrants to compete.

Producer Surplus

The variance between the intended selling price by producers and the real price they end up receiving.

Consumers

Individuals or entities that purchase goods and services for personal use.

  • Evaluate the impact that monopolies have on the welfare of society, with an emphasis on understanding deadweight loss and welfare gains.
verifed

Verified Answer

DF
david fernandezJul 21, 2024
Final Answer :
False
Explanation :
Breaking up a monopoly can lead to more competition, lower prices, and increased innovation, resulting in overall gains to consumers. While the producer may lose its monopoly power and some profits, it can still benefit from operating in a more competitive market. Additionally, breaking up a monopoly can lead to the creation of new, smaller businesses, which can also benefit the economy.