At the profit-maximizing level of production,a perfectly competitive industry will produce an _____ amount of output,and a monopolist produces an _____ amount of output.
A)efficient;efficient
B)inefficient;efficient
C)inefficient;inefficient
D)efficient;inefficient

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms produce at the point where price equals marginal cost, which is considered efficient because it maximizes total surplus. A monopolist, however, restricts output to increase prices, producing less than the efficient level, which results in an inefficient allocation of resources.

At the Profit-Maximizing Level of Production,a Perfectly Competitive Industry Will