Which of the following statements describes how a monopolist's cost curves compare to those of a perfectly competitive firm?
A)The monopolist's marginal cost curve is downward sloping, while the perfectly competitive firm's is flat.
B)The monopolist's average total cost curve is not necessarily minimized where it crosses the marginal cost curve.
C)The monopolist's average variable cost curve in not identical to the marginal cost curve, as it is for a perfectly competitive firm.
D)The shape of the cost curves are the same for a firm regardless of market structure.

Question

Quizplus · Accepted Answer

The shape of a firm's cost curves (marginal cost, average total cost, and average variable cost) does not depend on the market structure in which the firm operates. These curves are determined by the firm's technology and input costs, not by the market structure such as monopoly or perfect competition.

Which of the Following Statements Describes How a Monopolist's Cost