A feature of monopoly that leads to unfavorable consequences is that it:
A) reduces income inequality.
B) sets marginal cost equal to marginal revenue rather than price.
C) produces more output than if perfectly competitive firms characterized the same industry.
D) charges a lower price than if perfectly competitive firms characterized the same industry.

Question

Quizplus · Accepted Answer

Monopoly sets marginal cost equal to marginal revenue rather than price, which leads to higher prices and lower quantities produced compared to a perfectly competitive market. This results in reduced consumer surplus and deadweight loss, leading to unfavorable consequences.

A Feature of Monopoly That Leads to Unfavorable Consequences Is