Many economists criticize monopolists because they
A) charge a price that equals marginal cost rather than a price that equals average cost.
B) don't innovate.
C) produce a large quantity of waste.
D) produce less than the socially efficient level of output.

Question

Quizplus · Accepted Answer

Monopolists tend to produce less than the socially efficient level of output, which leads to a deadweight loss to society. This is because they set their price higher than the marginal cost of production, which reduces the quantity produced and sold. As a result, consumer surplus is reduced, and some potential buyers may not purchase the goods or services at all, leading to inefficiencies in the economy.

Many Economists Criticize Monopolists Because They