A monopoly is considered inefficient as compared to perfect competition because

ID: 1125476 • Letter: A

Question

a monopoly produces a lower output that perfect competition and charges a higher price.

a monopoly produces a higher output that perfect competition and charges a higher price.

a monopoly produces a lower output that perfect competition and charges a lower price.

a monopoly produces a higher output that perfect competition and charges a lower price.

a monopoly produces a lower output that perfect competition and charges a higher price.

a monopoly produces a higher output that perfect competition and charges a higher price.

a monopoly produces a lower output that perfect competition and charges a lower price.

a monopoly produces a higher output that perfect competition and charges a lower price.

Answer

a monopoly produces a lower output that perfect competition and charges a higher price.

Becuase the monopoly does not produce at MC=P which is socially efficient output.

Monopoly reduces output to earn profit which creates the deadweight loss to the society.

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