A simple way of describing the social cost of monopoly is to say that it
A) produces too much.
B) makes too much money.
C) has too much political power.
D) restricts output and charges a higher price than a perfectly competitive firm.

Question

Quizplus · Accepted Answer

The social cost of monopoly arises from the fact that the monopolist restricts output and charges a higher price than a perfect competitive firm would charge. This reduces consumer surplus and leads to a deadweight loss of economic efficiency. Therefore, D is the correct answer.

A Simple Way of Describing the Social Cost of Monopoly