Relative to a competitive situation, if a market lacks competition, economic theory suggests that
A) output will be lower and price higher.
B) output will be higher and price lower.
C) both output and price will be higher.
D) both output and price will be lower.

Question

Quizplus · Accepted Answer

In a market lacking competition, such as a monopoly, the firm can restrict output to raise prices, leading to lower output and higher prices compared to a competitive market.

Relative to a Competitive Situation, If a Market Lacks Competition