question archive Which of the following statements with respect to a monopolist is false? a
Which of the following statements with respect to a monopolist is false? a
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Which of the following statements with respect to a monopolist is false?
a. A monopoly tends to result in a lower quantity being sold than perfect competition does.
b. A monopolist can make higher profits if it can price discriminate.
c. A monopoly arises in a situation with few barriers to entry into the marketplace.
d. Monopoly is a situation in which a single firm dominates.
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The answer is C).
A monopoly is mot compatible with few barriers to entry into the market. The reasoning is simple. If a monopoly is earning profit and there is litter barriers to entry into the market, then other firms will have strong incentives to enter the market and drive down profit. As more firms enter, the number of firms will increase and the market will no longer be a monopoly.
