Which of the following is an argument in favor of a competitive market structure rather than monopoly?
A)Monopolies have greater ability to pursue research and design.
B)The lure of monopoly power provides a greater incentive for invention and innovation.
C)Monopolies produce less at a higher price than competitive markets,ceteris paribus.

Question

Quizplus · Accepted Answer

In a competitive market structure, there are multiple firms producing the same goods or services, leading to greater production and lower prices due to competition. In contrast, a monopoly has complete control over the market, resulting in higher prices and lower production levels. Therefore, C is the correct choice as it highlights the inefficiencies of a monopoly over a competitive market structure. A and B may be argued as advantages of a monopoly, but the negative impact on consumers and the economy outweighs any potential benefits.

Which of the Following Is an Argument in Favor of a Competitive