Which of the following statements about the effects of monopoly is incorrect?
A)A monopoly restricts output to maximize profits.
B)A monopoly raises price above the competitive level.
C)A monopoly causes input prices to rise.
D)A monopoly causes a redistribution of income.

Question

Quizplus · Accepted Answer

A monopoly may have some control over input prices, but it is not a necessary effect. The primary effects of a monopoly are to restrict output and raise prices, which can lead to a redistribution of income.

Which of the Following Statements About the Effects of Monopoly