Monopolies are inefficient because at the profit maximising quantity there will still be consumers whose willingness-to-pay is higher than the product's marginal cost.

Question

Quizplus · Accepted Answer

Monopolies restrict output and charge a price higher than the marginal cost, which results in a deadweight loss as there are consumers who are willing to pay a higher price than the cost of production but are unable to do so. This leads to inefficiencies in the market.

Monopolies Are Inefficient Because at the Profit Maximising Quantity There