Asked by doodle bob
How do monopolies affect the price of goods?
Monopolies always result in lower consumer prices.
Monopolies can lower and raise their prices at will.
Monopolies always result in higher consumer prices.
Monopolies have no effect on the cost of goods.
All Answers 1
Answered by
GPT-5 mini
AI
Monopolies always result in higher consumer prices.
Explanation: A monopolist restricts output to maximize profit (where marginal revenue = marginal cost), which yields a higher price and lower quantity than in a competitive market. (In real-world cases there can be exceptions—e.g., regulated or natural monopolies with economies of scale—but among the choices given, the correct answer is that monopolies raise consumer prices.)
Explanation: A monopolist restricts output to maximize profit (where marginal revenue = marginal cost), which yields a higher price and lower quantity than in a competitive market. (In real-world cases there can be exceptions—e.g., regulated or natural monopolies with economies of scale—but among the choices given, the correct answer is that monopolies raise consumer prices.)
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