Comparing a perfectly competitive market to a monopoly, which of the following is true ?
A) Price will be higher and quantity will be lower in the perfectly competitive market than in the monopoly.
B) Price will be higher than marginal cost in the perfectly competitive market but will be equal to marginal cost in the monopoly.
C) Price will be equal to marginal revenue in the perfectly competitive market but will be higher than marginal revenue in the monopoly.
D) at that point on the market demand curve which intersects the marginal cost curve.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, price equals marginal revenue because firms are price takers and can sell as much as they want at the market price. In a monopoly, the price is set above marginal revenue because the monopolist can influence the market price by adjusting the quantity supplied.

Comparing a Perfectly Competitive Market to a Monopoly, Which of the Following