Under monopoly
A)too small a share of society's resources is used to produce the monopolized commodity.
B)Adam Smith's invisible hand assures efficient resource allocation.
C)too large a share of society's resources is being used to produce the monopolized commodity.
D)MC MU.

Question

Under monopoly
A)too small a share of society's resources is used to produce the monopolized commodity.
B)Adam Smith's invisible hand assures efficient resource allocation.
C)too large a share of society's resources is being used to produce the monopolized commodity.
D)MC > MU.

Quizplus · Accepted Answer

Under monopoly, the monopolist has the power to set prices higher than the marginal cost of production, leading to a reduction in output and an increase in price. This means that society's resources are not being utilized efficiently, and too small a share of society's resources is being used to produce the monopolized commodity.

Under Monopoly