Respuesta :
One of the main economic arguments against unchecked, profit-maximizing monopolies is that, in the short run, they limit output to levels where their products are valued higher than their marginal cost of production.
What do you mean by Monopoly?
A scenario known as monopoly occurs when there is only one seller in the market. The monopoly case is viewed as the polar opposite of perfect competition in conventional economic analysis. The industry's downward-sloping demand curve is, by definition, the demand curve that the monopolist faces.
The quantity of goods produced at which marginal revenue equals marginal cost, or when MR = MC, is the decision that will maximize profits for the monopoly. If the monopoly produces less, MR > MC at given output levels, and the enterprise can increase profits by increasing output.
By equating marginal cost and marginal revenue in a monopolistic market and solving for the cost of a single good and the necessary production volume, a firm can optimize its overall profit.
Therefore, Restrict output to levels at which their products are valued more than the marginal cost of producing them.
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