Confronted with the same unit cost data, a monopolistic producer will charge
A)the same price and produce the same output as a competitive firm.
B)a higher price and produce a larger output than a competitive firm.
C)a higher price and produce a smaller output than a competitive firm.
D)a lower price and produce a smaller output than a competitive firm.

Question

Quizplus · Accepted Answer

A monopolistic producer, unlike a competitive firm, has the market power to set prices above marginal costs, leading to a higher price and smaller output compared to a competitive firm, which operates where price equals marginal cost.

Confronted with the Same Unit Cost Data, a Monopolistic Producer