If a monopoly sells a quantity of its good that is smaller than the socially optimal level,what do we know about the price
A)It will be inefficiently low since it is lower than average total cost.
B)It will be inefficiently low since it is higher than average total cost.
C)It will be inefficiently high since it is higher than marginal cost.
D)It will be inefficiently high since it is lower than marginal cost.

Question

Quizplus · Accepted Answer

In a monopoly, the price is set above marginal cost, leading to a quantity sold that is less than the socially optimal level, resulting in an inefficiently high price.

If a Monopoly Sells a Quantity of Its Good That