Assuming that a monopolist and the competitive market in a market would have the same cost functions, the inefficiency of monopoly

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    is due to the higher price, lower quantity and deadweight loss that results when output levels are set where is marginal revenue is equal to marginal cost.
     is due to the monopolist charging as high a price as desired because it is the sole provider of the good or service.
     is due to the higher price charged causing consumer surplus to be lost to producers in the form of additional producer surplus.
     would be eliminated if monopoly profits were taxed and redistributed to the consumers purchasing the good or service.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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is due to the higher price, lower quantity and deadweight loss that results when output levels are set where is marginal revenue is equal to marginal cost.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)



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