Compared to perfect competition, a monopoly in the long run
A)produces a larger output.
B)charges a higher price.
C)produces the minimum average cost.
D)All of these responses are correct.

Question

Quizplus · Accepted Answer

A monopoly can charge a higher price because it has no competition, and therefore can set the price at a higher level that maximizes profits. This means that consumers pay more for the same goods or services compared to in a perfectly competitive market. While a monopoly may not produce a larger output, it does not necessarily produce at the minimum average cost either, as it may choose to operate at a level of output that maximizes profits rather than minimizing average cost.

Compared to Perfect Competition, a Monopoly in the Long Run