Question

How does the monopolist’s decision compare to the efficient price and output?Choose one:A. The monopolist charges more and produces less.B. The monopolist charges more and produces more.C. The monopolist charges less and produces more.D. The monopolist charges less and produces less.

Answer 1

Answer:

Option A is correct one.

Explanation:

The monopolists charges more and produces less

The profit maximizing level of output for a monopoly is where marginal revenue is equal to marginal cost.The monopolist is likely to produce less and charge more in order to maximize profits as compared to efficient price and output.