Asked by Jordan Jeyachandran on May 10, 2024
Verified
Which of the following results will not occur in a monopolistic market?
A) The monopolist will maximize profits by setting a price that's higher than marginal cost.
B) The price will be higher than what would prevail in a competitive market.
C) In monopoly pricing, income is, in effect, transferred from consumers to the monopolist.
D) The output level will be higher than in a competitive market.
Monopolistic Market
A market structure characterized by a single seller who has exclusive control over a product or service, limiting competition.
Marginal Cost
The cost associated with the production of an additional unit of a good or service.
- Examine the effects of monopolistic behaviors and the responses from regulators on the competitiveness of the market.
- Perceive the legal avenues and legislations purposed to minimize monopoly influence and foster a competitive atmosphere.
Verified Answer
EA
Emilio Augusto Mendes MachadoMay 12, 2024
Final Answer :
D
Explanation :
In a monopolistic market, the output level is typically lower than in a competitive market because the monopolist restricts output to raise prices and maximize profits, unlike in a competitive market where firms produce at a level where price equals marginal cost.
Learning Objectives
- Examine the effects of monopolistic behaviors and the responses from regulators on the competitiveness of the market.
- Perceive the legal avenues and legislations purposed to minimize monopoly influence and foster a competitive atmosphere.
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