A profit-maximizing monopolist produces an output level that is allocatively inefficient because
A)price is greater than marginal cost
B)price is less than marginal cost
C)marginal revenue is greater than marginal cost
D)marginal revenue is less than marginal cost
E)consumers wish to purchase all that is produced

Question

Quizplus · Accepted Answer

A profit-maximizing monopolist is allocatively inefficient because it sets the price above marginal cost (P > MC), leading to a deadweight loss in the market.

A Profit-Maximizing Monopolist Produces an Output Level That Is Allocatively