Which of the following statements is true?
A)The perfectly competitive firm produces a level of output at which P=MC.
B)The single-price monopolist produces a level of output at which P MC.
C)The perfectly price-discriminating monopolist produces a level of output at which PMC.
D)a and b
E)all of the above

Question

Which of the following statements is true?
A)The perfectly competitive firm produces a level of output at which P=MC.
B)The single-price monopolist produces a level of output at which P > MC.
C)The perfectly price-discriminating monopolist produces a level of output at which P>MC.
D)a and b
E)all of the above

Quizplus · Accepted Answer

In perfect competition, firms produce where price equals marginal cost (P=MC). A single-price monopolist produces where price is greater than marginal cost (P>MC) because it has market power and can set prices above marginal cost.

Which of the Following Statements Is True