Which of the following is likely in a monopolized market?
A) a price that exceeds marginal cost
B) a price that exceeds marginal revenue
C) a welfare loss due to the restriction of output
D) all of the above

Question

Quizplus · Accepted Answer

In a monopolized market, the firm has market power and is able to set the price higher than the marginal cost, leading to a higher price than the optimal market equilibrium. This higher price also exceeds the marginal revenue, further reducing the quantity demanded and creating a welfare loss due to the restriction of output. Therefore, all of the above options are likely in a monopolized market.

Which of the Following Is Likely in a Monopolized Market