Question

When compared with the purely competitive industry with identical costs of production, a monopolist will charge: higher price and produce more output. higher price and produce more output. lower price and produce more output. lower price and produce more output. lower price and produce less output. lower price and produce less output. higher price and produce less output. higher price and produce less output. the same price and produce the same output.

Answer 1

Answer: Higher price and produce less output.

Explanation:

A monopolist is the only producer of a good in the market or at least wields significant market power. As a result, they can set their own prices without regard for how competitors would react.

This would lead to a situation where the monopoly does not have to be efficient and so will produce less goods than a perfect competition would and in order to make more profit - and because of less efficiency meaning higher costs - they will charge a higher price for output.