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Why do monopoly market structures charge higher prices than would be charged by more competitive market structures?
Suggested Answer: C
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12 comments · newest first
CH
Cheryl
2 months ago
B makes sense too. They need to cover R&D costs, which can be high.
LI
Lizette
2 months ago
I lean towards D. Barriers keep competition away, allowing higher prices.
MA
Matthew
2 months ago
I think C is the best answer. Monopolies limit output to raise prices.
DO
Donette
3 months ago
Barriers to entry are a huge factor, no doubt!
VA
Valentine
3 months ago
Higher R&D costs definitely play a role too.
TI
Tina
3 months ago
Really? I thought competition would keep prices in check.
HA
Hassie
3 months ago
Totally agree, they control the supply!
SA
Sabina
3 months ago
Monopolies can restrict output to raise prices.
BL
Blythe
3 months ago
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.
AL
Alyce
4 months 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?
LA
Larae
4 months 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.
SA
Samuel
4 months 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.