Use the figure below to answer the following questions.

Figure 13.3.1
-Refer to Figure 13.3.1. If this market is a single-price monopoly, then
A)it is efficient because the monopoly is maximizing economic profit.
B)price is equal to marginal cost and the outcome is efficient.
C)price is less than marginal cost, and consumer surplus is less than in a perfectly competitive market.
D)price is greater than the marginal cost and the outcome is inefficient.
E)the outcome is inefficient because the monopoly's costs are too high.

Question

Use the figure below to answer the following questions.
  
Figure 13.3.1
-Refer to Figure 13.3.1. If this market is a single-price monopoly, then
A)it is efficient because the monopoly is maximizing economic profit. 
B)price is equal to marginal cost and the outcome is efficient. 
C)price is less than marginal cost, and consumer surplus is less than in a perfectly competitive market. 
D)price is greater than the marginal cost and the outcome is inefficient. 
E)the outcome is inefficient because the monopoly's costs are too high.

Quizplus · Accepted Answer

In a single-price monopoly, the price is set above marginal cost, leading to an inefficient outcome as it results in a deadweight loss compared to a perfectly competitive market where price equals marginal cost.

Use the Figure Below to Answer the Following Questions