Given identical cost conditions, a monopolist will charge a higher price and earn higher profits than would occur if the market had been perfectly competitive.

Question

Quizplus · Accepted Answer

In a monopoly, the single seller has market power to set prices above marginal costs, leading to higher prices and profits than in a perfectly competitive market, where firms are price takers and can only earn normal profits in the long run.

Given Identical Cost Conditions, a Monopolist Will Charge a Higher