Compared to the equilibrium price and quantity sold in a competitive market, a monopolist will charge a ________ price and sell a ________ quantity.

Question

Quizplus · Accepted Answer

A monopolist faces a downward sloping demand curve, meaning that in order to sell more units of output, they will need to lower the price. However, since they are the only seller in the market, they have market power and can charge a higher price than the competitive equilibrium price. Therefore, the monopolist will charge a higher price and sell a smaller quantity compared to a competitive market.

Compared to the Equilibrium Price and Quantity Sold in a Competitive