Assuming that firms maximize profits, how will the price and output policy of an unregulated monopolist compare with ideal market efficiency?

A) The output of the monopolist will be too large and its price too high.
B) The output of the monopolist will be too large and its price too low.
C) The output of the monopolist will be too small and its price too high.
D) The output of the monopolist will be too small and its price too low.

Monopolist

A market participant who has exclusive control over the supply of a particular good or service, allowing them to set prices without competition.

Market Efficiency

A condition in which all available information is fully reflected in prices and assets are priced appropriately.

Ideal Market

A theoretical marketplace where information is freely available to all participants, products are homogeneous, and there are no transaction costs, leading to perfect competition.