Monopolization of a competitive industry to become a cartel will (assuming technology is fixed) lead toSelected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer.alower prices and higher output.bhigher prices and the same level of output.clower output and the same level of price.dhigher prices and lower output.ehigher output and higher prices.
Question
Monopolization of a competitive industry to become a cartel will (assuming technology is fixed) lead toSelected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer.alower prices and higher output.bhigher prices and the same level of output.clower output and the same level of price.dhigher prices and lower output.ehigher output and higher prices.
Solution
The correct answer is d. higher prices and lower output.
Here's why:
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A monopoly or a cartel has the ability to control the supply of a product or service in the market. This means they can adjust the quantity of the product or service available to consumers.
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By reducing the supply (lower output), they can create an artificial scarcity. This scarcity can drive up the price of the product or service.
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As a result, consumers end up paying higher prices for less quantity (lower output). This is a common characteristic of monopolies and cartels, and is generally considered detrimental to consumer welfare.
Similar Questions
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Since it faces no competitors, a monopolist always makes a positive economic profit.Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer.aTruebFalse
A monopoly will engage in price discrimination, if it can, in order to increase profits by doing which of the following?Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.aBy selling more of its goodsbBy reducing costs for some of its productscBy continuing to produce the same amountdBy increasing prices for all consumers and producing less
From an economic efficiency perspective, the primary concern about monopoly power is that monopolies generallySelected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer.aearn too much profitbfail to produce some units of output that have high social value compared with the cost of producing those unitscproduce too much output since there are no competitorsdpay low wages to their employees
In the long run, the monopolist's economic profits will be ______________ than the total of the competitive firms' profits.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.ahigherblowercthe same
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