Relative to a competitive market equilibrium, the profit maximizing quantity chosen by a monopolist will result in a deadweight loss because:
A)the monopolist will produce at a quantity lower than the competitive equilibrium.
B)the monopolist will produce at a quantity higher than the competitive equilibrium.
C)the monopolist will charge a price lower than the competitive equilibrium.
D)the monopolist will keep producing at a quantity even though the MR

Question

Relative to a competitive market equilibrium, the profit maximizing quantity chosen by a monopolist will result in a deadweight loss because:
A)the monopolist will produce at a quantity lower than the competitive equilibrium.
B)the monopolist will produce at a quantity higher than the competitive equilibrium.
C)the monopolist will charge a price lower than the competitive equilibrium.
D)the monopolist will keep producing at a quantity even though the MR < MC.

Quizplus · Accepted Answer

A monopolist produces less than the competitive equilibrium quantity to maximize profits, leading to a higher price and a deadweight loss due to the reduction in total surplus.

Relative to a Competitive Market Equilibrium, the Profit Maximizing Quantity