Assuming the same revenue and cost conditions, a monopoly produces less than a perfectly competitive firm produces, charges a higher price, and causes a deadweight loss.

Question

Quizplus · Accepted Answer

In a monopoly, the single seller maximizes profit by producing where marginal revenue equals marginal cost, which typically results in a lower quantity and higher price compared to a perfectly competitive market. This leads to a deadweight loss as some consumer and producer surplus is not realized, unlike in perfect competition where markets produce at the point where price equals marginal cost, maximizing total surplus.

Assuming the Same Revenue and Cost Conditions, a Monopoly Produces