Why Is a Monopoly Inefficient

question 130

Multiple Choice

Why is a monopoly inefficient?

• A) because the cost of increased production is less than the value that society places on it
• B) because price exceeds marginal revenue
• C) because consumers are forced to pay higher prices for products
• D) because firms are able to earn economic profits

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Definitions:

Financial Indifferent

A state where different options present the same financial value or outcome, leaving the decision-maker indifferent in financial terms.

Manufacturing Capacity

The total amount of production a manufacturing facility can achieve within a specific period, considering limitations like machinery and labor.

Special Order

A special order is a one-time or unusual request from a customer that can require different pricing, terms, or production considerations compared to standard orders.

Regular Sales

The routine transactions and revenue generated from the normal business operations excluding any extraordinary or non-recurring sales.