True or False? Unregulated contested monopolies can be just as efficient as their perfectly competitive counterparts.

Question

True or False?

Unregulated contested monopolies can be just as efficient as their perfectly competitive counterparts. 

a. True

b. False

Answer 1

False, unregulated monopolists have an attempt to raise price. Since the fixed cost for starting a monopoly business is very high, which discourage other competitors to enter the market. As there is no substitute to the products in the market, monopolists have more power to determine the market price.(more inefficient )