Which of the following is a TRUE statement about monopoly and perfect competition?
A) Price is always higher and output higher under monopoly than under perfect competition.
B) Because costs do not depend on market structure, price is usually higher and output is always lower under monopoly than perfect competition.
C) If there are substantial economies of scale, price may be lower and output greater under monopoly than under perfect competition.
D) If there are substantial economies of scale, price may be lower and output greater under monopoly than under perfect competition, and price may be below marginal cost instead of equal to marginal cost.

Question

Quizplus · Accepted Answer

Monopolies can potentially lead to lower prices and greater output if there are significant economies of scale, as a single producer can exploit these economies more effectively than multiple firms in a competitive market. This can result in more efficient production and potentially lower prices for consumers, although this is not always the case in practice.

Which of the Following Is a TRUE Statement About Monopoly