Given the same unit costs, a monopoly will
A)charge a lower price than a competitive firm.
B)produce the same output as a competitive firm.
C)produce less output than a competitive firm.
D)produce more output than a competitive firm.
E)charge the same price as a competitive firm.

Question

Quizplus · Accepted Answer

A monopoly has the ability to restrict output in order to increase the price and maximize profits. This means that the monopoly will produce less output than a competitive firm, even if the unit costs are the same. Therefore, choice C is the correct answer.

Given the Same Unit Costs, a Monopoly Will