Monopolies tend to
A) hire more labor than duopolists or competitive firms, hence they are inefficient.
B) hire more labor than competitive firms but less than duopolists.
C) hire less labor than competitive firms because they produce at an inefficient level.
D) hire more labor because they produce at an inefficient level.

Question

Quizplus · Accepted Answer

Monopolies tend to produce at an inefficient level and hire less labor than competitive firms. They have little incentive to operate at an efficient level as they have no competition to keep them on their toes. As a result, they produce less than what would be socially optimal, which means they require less labor to produce.

Monopolies Tend to