Monopoly power is best described as the ability to:
A) charge the profit-maximizing price.
B) produce the profit-maximizing output level.
C) earn economic profits without causing new firms to enter the market.
D) produce where marginal revenue intersects halfway between the origin and the demand curve.

Question

Quizplus · Accepted Answer

Monopoly power is the ability to earn economic profits without facing competition from new firms entering the market. A monopoly can restrict output and increase prices, which results in higher profits. It is not necessary for a monopoly to produce at the profit-maximizing output level or at the point where marginal revenue intersects halfway between the origin and the demand curve.

Monopoly Power Is Best Described as the Ability To