In evaluating profit-maximizing or loss-minimizing behavior, the main difference between firms in pure competition and monopoly is found in the:
A) profit-maximizing rule.
B) cost conditions they face.
C) demand and revenue conditions they face.
D) all of the above.

Question

Quizplus · Accepted Answer

The main difference between firms in pure competition and monopoly lies in the demand and revenue conditions they face. In pure competition, the firm faces a perfectly elastic demand curve, meaning it can sell any quantity at the market price. In contrast, a monopoly faces the market demand curve, which is downward sloping, allowing it to influence the price of its product.

In Evaluating Profit-Maximizing or Loss-Minimizing Behavior, the Main Difference Between