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When firms exercise monopoly (price setting) power, which of the following is true?consumers end up paying relatively high prices and society is made better off

consumers end up paying relatively high prices and society is made worse off

consumers end up paying relatively low prices and society is made worse off

consumers end up paying relatively low prices and society is made better off

User Shanabus
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Answer:consumers end up paying relativly higher prices and society is made worse off

Step-by-step explanation:

When firms exercise monopoly (price setting) power, consumers end up paying relatively high prices and society is made worse off. This is because monopolies have the ability to charge higher prices and limit output since they are the sole provider of the good or service, resulting in reduced consumer surplus and deadweight loss to society. Monopolies may also engage in rent-seeking behavior, which can lead to misallocation of resources and decreased innovation. Therefore, monopolies are generally considered to be detrimental to society and the economy as a whole.

User Derrick Moeller
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