Compared to an otherwise identical competitive firm,a firm with monopoly power will hire:
A)fewer workers,reflecting its decision to produce less output
B)more workers because the higher price charged by the monopoly raises its MRP
C)fewer workers because workers are less productive in a monopoly setting
D)more workers because monopolies have higher profits and can pay higher wages

Question

Quizplus · Accepted Answer

A monopoly produces less output compared to a competitive firm because it restricts quantity to raise prices, leading to the hiring of fewer workers.

Compared to an Otherwise Identical Competitive Firm,a Firm with Monopoly