Question

If an industry could be organized either perfectly competitively or as monopoly, a monopoly would? a. produce less output. b. produce where P MC. c. charge higher prices. d. All of these

Answer 1

Because the marginal revenue received by a perfectly competitive firm is equal to the price P, so that P = MR, the profit-maximizing rule for a perfectly competitive firm can also be written as a recommendation to produce at the quantity where P = MC.

Answer 2

the extremes of perfect competition and monopoly. Monopolistic ... A firm has excess capacity if it produces less than the efficient ... petitors will follow but tha