Relative to a competitively organized industry, a monopoly is more likely to produce
A) more output, charge higher prices, and earn economic profits.
B) less output, charge lower prices, and earn economic profits.
C) less output, charge lower prices, and earn only a normal profit.
D) less output, charge higher price, and earn economic profits.

Question

Quizplus · Accepted Answer

A monopoly tends to produce less output and charge a higher price compared to a competitive market because it faces no competition and can set prices above marginal costs, leading to economic profits.

Relative to a Competitively Organized Industry, a Monopoly Is More