Which of the following describes one of the differences in profit-maximizing behavior between a monopoly and a competitive firm?
A)A monopoly produces more and charges the same price as a competitive firm.
B)A monopoly produces less and charges the same price as a competitive firm.
C)A monopoly produces more and charges a higher price than a competitive firm.
D)A monopoly produces less and charges a lower price than a competitive firm.
E)A monopoly produces less and charges a higher price than a competitive firm.

Question

Quizplus · Accepted Answer

A monopoly has the ability to restrict output and increase the price due to the absence of competition. This means that a monopoly will produce less output than a competitive firm and charge a higher price for it.

Which of the Following Describes One of the Differences in Profit-Maximizing