If a monopoly is forced to charge a price = MC:
A) output will fall.
B) resource allocation will improve.
C) the monopoly will incur an economic loss.
D) all of the above will occur.

Question

Quizplus · Accepted Answer

When a monopoly is forced to charge a price equal to marginal cost (MC), it leads to an improvement in resource allocation. This is because the price now reflects the true cost of producing an additional unit, aligning production with consumer demand more efficiently. This is a fundamental principle of economic efficiency where prices reflect marginal costs.

If a Monopoly Is Forced to Charge a Price =