Compared to a perfectly competitive market, a monopoly tends to produce
A)more output and charge a higher price
B)the same amount of output, but charge a higher price
C)less output and charge a higher price
D)less output and charge the same price
E)less output and charge a lower price

Question

Quizplus · Accepted Answer

A monopoly has the ability to restrict output in order to increase prices since there are no close substitutes to their product. As a result, a monopoly tends to produce less output and charge a higher price compared to a perfectly competitive market.

Compared to a Perfectly Competitive Market, a Monopoly Tends to Produce