The following question are based on the following diagram of a monopolist:

-If the product demand curve and cost functions of a perfectly competitive industry and a monopolist are the same,then compared to a monopoly,the perfectly competitive industry's output and price tend to be,respectively
A) larger and higher.
B) smaller and higher.
C) larger and lower.
D) smaller and lower.
E) the same and lower.

Question

The following question are based on the following diagram of a monopolist:
 
-If the product demand curve and cost functions of a perfectly competitive industry and a monopolist are the same,then compared to a monopoly,the perfectly competitive industry's output and price tend to be,respectively
A) larger and higher. 
B) smaller and higher. 
C) larger and lower. 
D) smaller and lower. 
E) the same and lower.

Quizplus · Accepted Answer

In a perfectly competitive market, firms produce where price equals marginal cost, leading to a larger output and lower price compared to a monopoly, where the firm maximizes profit by producing where marginal revenue equals marginal cost, resulting in lower output and higher prices.

The Following Question Are Based on the Following Diagram of a Monopolist