Why do consumers bear a cost from that monopoly

Reference no: EM13690238

A patent gives a firm a monopoly in the production of the patented good. While monopoly profits provide an incentive for firms to innovate, the monopoly power imposes a cost on consumers.

a) Why do consumers bear a cost from that monopoly?

b) Is the cost to consumers greater than the profits earned by the monopolist?

Reference no: EM13690238

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