charge a higher price
produce a lower quantity of the product
make a greater amount of economic profit
All of the above
Answer is Right!
Answer is Wrong!
The correct answer is D. All of the above.
A monopolist is the only seller of a good or service in a market. This means that they have a great deal of market power and can set prices without fear of losing customers to competitors. As a result, monopolists are more likely to charge higher prices, produce lower quantities of the product, and make greater amounts of economic profit than firms in a perfectly competitive market.
Here is a more detailed explanation of each option:
- Option A: A monopolist is more likely to charge a higher price than a firm in a perfectly competitive market. This is because a monopolist has no competition, so they can set prices without fear of losing customers to competitors. As a result, they can charge a higher price and still sell all of their output.
- Option B: A monopolist is more likely to produce a lower quantity of the product than a firm in a perfectly competitive market. This is because a monopolist faces a downward-sloping demand curve. This means that if they want to sell more, they have to lower their price. However, if they lower their price too much, they will make less profit. As a result, they will choose to produce a quantity where the marginal revenue is equal to the marginal cost. This will be a lower quantity than the quantity that would be produced in a perfectly competitive market.
- Option C: A monopolist is more likely to make a greater amount of economic profit than a firm in a perfectly competitive market. This is because a monopolist has no competition, so they can set prices without fear of losing customers to competitors. As a result, they can charge a higher price and still sell all of their output. This means that they will make more profit than a firm in a perfectly competitive market.
In conclusion, a monopolist is more likely to charge a higher price, produce a lower quantity of the product, and make greater amounts of economic profit than firms in a perfectly competitive market.