The problem with monopolies is their ability (i) to do away with barriers to entry.
(ii) to price their product at a level that exceeds marginal cost.
(iii) to restrict output below the socially efficient level of production.
A)(i) and (ii)
B)(ii) and (iii)
C)(iii) only
D)(i), (ii), and (iii)

Question

The problem with monopolies is their ability (i)	to do away with barriers to entry.
(ii)	to price their product at a level that exceeds marginal cost.
(iii)	to restrict output below the socially efficient level of production.
A)(i) and (ii)
B)(ii) and (iii)
C)(iii) only
D)(i), (ii), and (iii)

Quizplus · Accepted Answer

Monopolies have the ability to price their products higher than their marginal cost, which can lead to inefficiency and reduced consumer surplus. They also have the power to restrict output, leading to a level of production that is below the socially efficient level. While they may have the ability to do away with some barriers to entry, this is not always the case and not always a negative outcome. Therefore, the best choice is B - monopolies have negative effects on both pricing and output levels.

The Problem with Monopolies Is Their Ability (I) to Do Away