In general, a monopoly is likely to:
A) earn lower profits than a perfectly competitive firm.
B) earn about the same profits as a perfectly competitive firm.
C) sell more output than if perfectly competitive firms characterized the same industry.
D) charge a higher price than if perfectly competitive firms characterized the same industry.

Question

Quizplus · Accepted Answer

A monopoly has no competition, so they have the power to set the price at a level that maximizes their profits. This means they can charge a higher price than if there were perfectly competitive firms characterized the same industry.

In General, a Monopoly Is Likely To