Why does inefficiency arise from a monopoly
A)The monopoly firm earns an excessively large profit.
B)Some buyers will refrain from buying the good, due to the high price.
C)Some sellers will refrain from buying the good, due to the low price.
D)Consumers who buy the goods feel exploited.

Question

Quizplus · Accepted Answer

Monopolies have the ability to set prices higher than what the market would offer in a competitive market, leading to a decrease in demand for their product. This lowers the overall efficiency of the market by restricting output and prices being higher than they would be under competition.

Why Does Inefficiency Arise from a Monopoly