Because a monopolist does not face competition from other firms, the outcome in a market with a monopoly
A)does not illustrate profit maximization.
B)is often not in the best interest of society.
C)is characterized by unlimited profits.
D)would be improved if the government produced the product rather than a private firm.

Question

Quizplus · Accepted Answer

A monopolist has the ability to set prices higher than what would be seen in a competitive market, leading to reduced output and higher prices, which is not in the best interest of society. This results in a deadweight loss of efficiency, where potential gains from trade are unrealized. Therefore, a market with a monopoly often does not lead to socially optimal outcomes.

Because a Monopolist Does Not Face Competition from Other Firms