Which of the following is true for a firm that is a monopolist?
A) the firm will make an economic profit in the short run.
B) the firm will produce a smaller quantity of output than what would be best from the viewpoint of ideal economic efficiency.
C) the additional revenue that can be generated from an increase in output will exceed the firm's price.
D) the firm can charge whatever it wants for its product since consumers have no alternatives.

Question

Quizplus · Accepted Answer

A monopolist produces less than the socially optimal quantity because it maximizes profit where marginal cost equals marginal revenue, not where price equals marginal cost, leading to inefficiency.

Which of the Following Is True for a Firm That