Answer true or false, with a brief explanation.

Question

Answer true or false, with a brief explanation.

1. Monopolies are always bad for consumers.

2. The supply curve of a monopolist is upward sloping.

3. Monopolies charge the highest price a consumer is willing to pay, thus capturing all consumer surplus.

Answer 1

1. False. Economies of scale may mean a monopoly can provide services at a cheaper cost to consumers, if regulated
2. True. As price rises, any producer supplies more, whether competitive or a monopoly
3. False. They don't capture all of consumer surplus, unless it's price discrimination. They maximize producer surplus.