Assuming That Firms Maximize Profits, How Will the Price and Output

question 101

Multiple Choice

Assuming that firms maximize profits, how will the price and output policy of an unregulated monopolist compare with ideal market efficiency?

• A) The output of the monopolist will be too large and the price too high.
• B) The output of the monopolist will be too small and the price too low.
• C) The output of the monopolist will be too small and the price too high.
• D) The price will be too high, but the impact of monopoly on the output is indeterminate.

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