Compared to a perfectly competitive industry, a monopolist will generally produce:
A) a greater level of output a lower price.
B) a greater level of output at a higher price.
C) a smaller level of output a lower price.
D) a smaller level of output at a higher price.
E) roughly the same level of output but at a higher price.

Question

Quizplus · Accepted Answer

A monopolist will generally produce a smaller level of output at a higher price compared to a perfectly competitive industry. This is because the monopolist has the power to restrict output and raise prices to increase their profits. In contrast, in a perfectly competitive market, firms have no market power and must accept the market price, which is determined by the intersection of supply and demand.

Compared to a Perfectly Competitive Industry, a Monopolist Will Generally