A firm which is a monopolist in an output market and a competitor in an input market is:
A)inefficient because MFC w.
B)inefficient because VMP MRP and MFC w.
C)inefficient because VMP MRP.
D)efficient.

Question

A firm which is a monopolist in an output market and a competitor in an input market is:
A)inefficient because MFC > w.
B)inefficient because VMP > MRP and MFC > w.
C)inefficient because VMP > MRP.
D)efficient.

Quizplus · Accepted Answer

A monopolist in an output market produces less output than a competitive firm, leading to a situation where the value of the marginal product (VMP) of an input is greater than the marginal revenue product (MRP), indicating inefficiency.

A Firm Which Is a Monopolist in an Output Market