question archive Compared to a single-price monopoly, the price charged by a competitive industry with the same costs A
Compared to a single-price monopoly, the price charged by a competitive industry with the same costs A
Subject:MarketingPrice:2.88 Bought3
Compared to a single-price monopoly, the price charged by a competitive industry with the same costs
A. could be higher than, lower than, or the same as the monopoly's price.
B. is higher than the monopoly's price.
C. is the same as the monopoly's price.
D. is lower than the monopoly's price.
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Answer: D
The monopolist earns a positive economic profit unlike firms in a perfectly competitive market because the monopolist artificially limits output. This is done to boost prices until profit is maximized. Thus, prices will be higher in a single-price monopoly than in a competitive industry.
