A feature of monopoly that leads to unfavorable consequences is that it:
A) increases income inequality.
B) sets marginal cost equal to price.
C) produces more output than if perfectly competitive firms characterized the same industry.
D) charges a lower price than if perfectly competitive firms characterized the same industry.

Question

Quizplus · Accepted Answer

Monopoly is able to set higher prices and earn higher profits, which often leads to income inequality as income is transferred from consumers to the monopolists. In a perfectly competitive market, price and output are both efficient, while monopoly leads to higher prices and lower output than a competitive market.

A Feature of Monopoly That Leads to Unfavorable Consequences Is