Monopolies will tend to overproduce goods and charge a higher price than the competitive price.
Monopolies will tend to underproduce goods and charge a higher price than the competitive price.

Question

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Monopolies have the ability to control prices since they are the sole supplier of a particular good or service. They can choose to charge a higher price than the competitive price to maximize profits. However, since they do not face competition, they may not have the same incentive to produce at the most efficient level or to invest in innovation, which may result in underproduction.

Monopolies Will Tend to Overproduce Goods and Charge a Higher