In monopoly:
A)a basic condition for efficiency is violated because P MC.
B)consumers are confronted with a price that is lower than marginal cost.
C)consumers will buy more of the good than is economically efficient.
D)consumers are confronted with a price that is lower than average total cost.

Question

In monopoly:
A)a basic condition for efficiency is violated because P > MC.
B)consumers are confronted with a price that is lower than marginal cost.
C)consumers will buy more of the good than is economically efficient.
D)consumers are confronted with a price that is lower than average total cost.

Quizplus · Accepted Answer

In monopoly, the basic condition for efficiency is violated because the price charged (P) is greater than the marginal cost (MC). This leads to a deadweight loss and reduces overall welfare in the economy.

In Monopoly