A Feature of Monopoly That Leads to Unfavorable Consequences Is

question 167

Multiple Choice

A feature of monopoly that leads to unfavorable consequences is that it:

• A) reduces income inequality.
• B) sets marginal cost equal to marginal revenue rather than price.
• C) produces more output than if perfectly competitive firms characterized the same industry.
• D) charges a lower price than if perfectly competitive firms characterized the same industry.

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Definitions:

Allocative Efficiency

An economic state where resources are allocated in a way that maximizes the net benefit to society, considering both production and desires of consumers.

Simultaneous Consumption

A consumption pattern in which a product or service is consumed by multiple users at the same time without reducing its availability to others.

Economies of Scale

The financial benefits companies experience from expanding their operation's size, where there's a general trend of decreasing unit costs with the growth in scale.