Compared to a perfectly competitive market,a single-price monopoly sets
A) a lower price.
B) the same price.
C) a higher price.
D) a price that might be higher, lower, or the same depending on whether the monopoly's marginal revenue curve lies above, below, or on its demand curve.
E) a price that might be higher, lower, or the same depending on whether the monopoly's marginal cost curve lies above, below, or on its marginal revenue curve.

Question

Quizplus · Accepted Answer

A single-price monopoly has market power and can influence the market price by reducing output to increase price. As a result, a monopoly will typically set a higher price than a perfectly competitive market to maximize its profits.

Compared to a Perfectly Competitive Market,a Single-Price Monopoly Sets