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CIMAPRA17-BA1-1 Exam - Topic 4 Question 128 Discussion

Actual exam question for CIMA's CIMAPRA17-BA1-1 exam

Question #: 128
Topic #: 4

[All CIMAPRA17-BA1-1 Questions]

Why do monopoly market structures charge higher prices than would be charged by more competitive market structures?

AThey are more likely to suffer from diseconomies of scale

BThey must recover their higher research and development expenditures

CThey can increase profits by reducing output to force prices higher

DThey have barriers to entry that stop customers going to new markets

Show Suggested Answer

Suggested Answer: C

by Justine at Jun 18, 2026, 05:57 AM

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Blythe

I lean towards option C because it seems logical that reducing output would lead to higher prices, but I’m not completely confident about the other options.

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Alyce

5 days ago

I’m a bit confused about the relationship between R&D costs and pricing. Isn’t it possible that those costs could be spread out in a competitive market too?

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Larae

10 days ago

I feel like this question is similar to one we practiced about barriers to entry. I think option D might be the right answer since monopolies can keep competitors out.

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Samuel

15 days ago

I think I remember that monopolies can set prices higher because they control the supply, but I'm not sure if that's the same as reducing output.

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