CIMA Exam CIMAPRA17-BA1-1 Topic 1 Question 70 Discussion

Actual exam question for CIMA's CIMAPRA17-BA1-1 exam

Question #: 70
Topic #: 1

[All CIMAPRA17-BA1-1 Questions]

Why do monopoly market structures charge higher prices than would be charged by more competitive market structures?

AThey are more likely to suffer from diseconomies of scale

BThey must recover their higher research and development expenditures

CThey can increase profits by reducing output to force prices higher

DThey have barriers to entry that stop customers going to new markets

Show Suggested Answer

Suggested Answer: A

by Kattie at May 25, 2023, 07:40 AM

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Mauricio

3 days ago

Hmm, I'm not so sure. What if the monopoly has to spend a ton on R&D to stay ahead? Wouldn't that justify the higher prices? Just a thought.

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Cory

5 days ago

Option C is the correct answer. Monopolies reduce output to drive up prices and maximize profits. It's all about that bottom line.

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Bobbie

8 days ago

But isn't it unfair to consumers who have no choice but to pay those high prices?

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Oliva

9 days ago

That's true, they can control the market and set prices as they please.

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Irving

11 days ago

Monopolies can charge higher prices because they have no competition.

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William

12 days ago

Monopolies can charge higher prices because they have no competition to keep them in check. Basic economics, really.

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Alpha

15 days ago

But they also have barriers to entry that prevent new competitors from entering the market.

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Kimbery

21 days ago

That's true, they can increase profits by reducing output and forcing prices higher.

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Shawana

22 days ago

Monopolies can charge higher prices because they have no competition.

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