Monopolies are socially inefficient because the price they charge is equal to marginal revenue. above marginal cost. equal to demand above demand.
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Question “Monopolies are socially inefficient because the price they charge is equal to marginal revenue. above marginal cost. equal to demand above demand.”
Monopolies are socially inefficient
because the price they charge is equal to marginal revenue. above
marginal cost. equal to demand above demand.
Answer
Answer: Option (B): Above marginal cost.
The price that is socially efficient is the one where the price is equal to the marginal costs.
Monopolists first produce where the marginal cost equals the marginal revenue, then charge the price that is higher than the marginal cost.
Monopolists charge a price that is higher than the marginal cost of producing the same quantity.