Question

(d) “Monopoly is socially inefficient because it charges a price higher than its MC
of production" True or False? Explain.

Answer 1

Answer:

Most people criticize monopolies because they charge too high a price, but what economists object to is that monopolies do not supply enough output to be allocatively efficient. ... The rule of profit maximization in a world of perfect competition was for each firm to produce the quantity of output where P = MC.