Under which of the following conditions could the monopoly price be less than the price that would result in perfect competition? When there are
A) diminishing marginal returns
B) substantial economies of scale
C) higher unit costs
D) increasing costs
E) constant returns to scale

Question

Quizplus · Accepted Answer

Substantial economies of scale can lead to a situation where a monopoly can produce at a lower cost per unit than would be possible in a perfectly competitive market. This is because a single large producer can more efficiently utilize resources and spread fixed costs over a larger output, potentially leading to lower prices for consumers.

Under Which of the Following Conditions Could the Monopoly Price