Question

In unregulated monopoly: a consumers are confronted with a price that is lower than marginal cost. b consumers are confronted with a price that is lower than average total cost. c because P > MC, a basic condition for efficiency is violated. d consumers will consume more of the good than is economically efficient. e consumers are faced with prices that are lower than marginal revenue.

Answer 1

Answer:

c. because P > MC, a basic condition for efficiency is violated.

Explanation:

An unregulated monopoly is a market in which monopoly holders have control over goods and services, giving them the ability to do whatever they like. Under unregulated monopoly, having a free market is impossible as price gouging is always evident.

In unregulated monopoly a basic condition for efficiency is violated because price is greater than marginal cost (P > MC).

Where P is the price and MC is the marginal cost of goods.