A monopoly will produce the same quantity of output as an otherwise similar perfectly competitive market if
A)it is a perfect price discriminator
B)it corners the market
C)barriers to entry are high enough
D)resource suppliers have market power too
E)price is greater than average total cost

Question

Quizplus · Accepted Answer

A monopoly can produce the same quantity of output as a perfectly competitive market if it is a perfect price discriminator. This means that the monopoly is able to charge each customer the maximum amount they are willing to pay for each unit of the product, which results in the monopoly producing the same quantity of output as a perfectly competitive market where marginal revenue equals marginal cost.

A Monopoly Will Produce the Same Quantity of Output as an Otherwise