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In this case, the statement "Assuming a constant cost industry, consumer surplus would be greater under monopoly than if the industry were perfectly competitive" is FALSE.
Here's why:
1. In a perfectly competitive market, where there are many buyers and sellers with no individual seller having a significant influence on the market price, consumer surplus tends to be higher compared to a monopoly.
2. Under perfect competition, prices are driven down to a level where the marginal cost of production equals the price, maximizing consumer surplus. Consumers benefit from lower prices and increased quantity in a competitive market setting.
3. On the other hand, in a monopoly, where there is only one seller controlling the market, consumer surplus tends to be lower as the monopolist can set higher prices and restrict output to maximize their own profit, reducing the surplus available to consumers.
In summary, consumer surplus is generally higher in a perfectly competitive market compared to a monopoly due to the presence of multiple competitive firms driving prices down to benefit consumers.
