When compared with the purely competitive industry with identical costs of production, a monopolist will produce
A) more output and charge the same price.
B) more output and charge a higher price.
C) less output and charge a higher price.
D) less output and charge the same price.

Question

Quizplus · Accepted Answer

A monopolist has market power, which means they can set the price higher than the marginal cost of production. This leads to a lower quantity of output being produced and a higher price being charged than in a purely competitive industry with identical costs of production.

When Compared with the Purely Competitive Industry with Identical Costs