If one of the agents in an Edgeworth Box has monopoly power and maximizes profit as the sole seller, then the economic outcome is:
A) inefficient because the monopoly has no incentive to be technically efficient.
B) inefficient because the monopoly produces less than the optimal amount of output.
C) Both A and B are correct.
D) none of the above
ANSWER
B
Place an order in 3 easy steps. Takes less than 5 mins.