The lack of entry into a monopolistic market may also lead to inefficiency in production, since there is no assurance that the monopoly firm's profit-maximizing output will occur in an optimum-sized plant.

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Without competition, a monopolistic firm may not have an incentive to operate at the lowest possible average cost. This can result in inefficiency in production, including potentially producing at a larger than optimal plant size.

The Lack of Entry into a Monopolistic Market May Also