Compared to a perfectly competitive market a monopoly market will usually generate ?
Correct answer: A. higher prices and lower output
- A. higher prices and lower output
- B. higher prices and higher output
- C. lower prices and lower output
- D. lower prices and higher output
Explanation
A monopoly restricts output below the competitive level and uses the resulting scarcity to charge a higher price. Thus the usual comparison is higher price and lower output.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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