Which of the following best explains an economic criticism of unregulated monopolists?
A) Monopolists do not try to minimize their costs of production.
B) Monopolists produce where marginal revenue is greater than marginal costs.
C) Monopolists attempt to produce too many products, and as a result, their prices are high, and consumer's waste time trying to choose between too many options.
D) Monopolists restrict output, and as a result, they fail to produce units that are valued more than the marginal cost of producing them.

Question

Quizplus · Accepted Answer

Unregulated monopolists have the power to restrict output to maximize their profits, which leads to a situation where they fail to produce units that are valued more than the marginal cost of producing them. This can result in overall social welfare losses, and hence is an economic criticism of unregulated monopolists. Choice A is not necessarily true, as monopolists may try to minimize their costs of production in order to maximize their profits. Choice B highlights a characteristic behavior of monopolists, but does not explain an economic criticism. Choice C does not make sense, as monopolists typically reduce the number of products they offer in order to increase their market power and pricing ability.

Which of the Following Best Explains an Economic Criticism of Unregulated