To say that a monopoly misallocates resources means that:
A) a monopoly produces an amount of goods beyond the socially desirable amount.
B) a monopoly produces at the point at which price is greater than marginal cost.
C) a monopoly produces at the point at which price is less than marginal cost.
D) a monopoly produces at the point at which price is greater than average total cost.

Question

Quizplus · Accepted Answer

A monopoly misallocates resources by producing where price is greater than marginal cost, leading to reduced output and higher prices compared to a competitive market, resulting in inefficiency and welfare loss.

To Say That a Monopoly Misallocates Resources Means That