A statement that best reflects an evaluation of monopoly firms is that:
A) they are economically efficient.
B) they have little or no market power.
C) consumers are given more choices, lower costs, and higher quality.
D) none of the above is true.

Question

Quizplus · Accepted Answer

Monopoly firms are not economically efficient as they have no competition to keep their prices in check and may produce at a higher cost. They have a significant amount of market power, which allows them to set high prices and limit consumer choice. Thus, consumers are not given lower costs or more choices or higher quality in a monopoly market.

A Statement That Best Reflects an Evaluation of Monopoly Firms