If a perfectly competitive firm and a single-price monopolist face the same demand and cost curves, then the competitive firm will produce a
A)greater output and charge a lower price than the monopolist.
B)greater output but charge the same price as the monopolist.
C)greater output and charge a higher price than the monopolist.
D)smaller output and charge a lower price than the monopolist.
E)smaller output and charge a higher price than the monopolist.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms produce where price equals marginal cost, leading to a higher output and lower price compared to a monopolist, who produces where marginal revenue equals marginal cost and charges a price above marginal cost, resulting in lower output and higher price.

If a Perfectly Competitive Firm and a Single-Price Monopolist Face