Common sense might say that a monopolist would produce more output than a competitive industry facing the same marginal costs. After all, if you’re making a profit, you want to sell as much as you can, don’t you? What’s wrong with this line of reasoning? Why do monopolistic industries sell less than competitive industries?

The reason why monopolistic industries sell less than competitive industries because:

According to the given question, we can see that we need to show why a monopolist would have to produce more output in order to make profit, based on the marginal costs of both markets.

As a result of this, we can see that a monopolistic market which is one who seems to be totally dominant in the market would sell less than competitive industries because the competitive market attracts more customers based on their competitive pricing and benefits.

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Explanation:

Even though a monopolist usually controls the market price of the commodity it may not be producing more because a monopolist overall goal is to achieve profit maximization.

However, producing more output would not be in their best interest despite been the market maker because it will decrease the price of the goods in the market due to over supply, leading to lower profit for them.

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