Which of the following is NOT a difference between monopolies and perfectly competitive markets?
A) Monopolies can earn profits in the long run while perfectly competitive firms break even.
B) Monopolies charge a price higher than marginal cost while perfectly competitive firms charge a price equal to marginal cost.
C) Monopolies choose to produce the quantity at which marginal revenue equals marginal cost while perfectly competitive firms do not.
D) Monopolies face downward sloping demand curves while perfectly competitive firms face horizontal demand curves.

Question

Quizplus · Accepted Answer

The statement "Monopolies choose to produce the quantity at which marginal revenue equals marginal cost while perfectly competitive firms do not" is incorrect. In both monopolies and perfectly competitive markets, firms will produce where marginal cost equals marginal revenue in order to maximize profits or minimize losses. Therefore, the correct answer is C.

Which of the Following Is NOT a Difference Between Monopolies