in which of the following industries do firms set prices
a. competitive market but not monopoly markets
b. monopoly but not competitive markets.
c. competitive and monopoly markets
d. neither monopoly nor competitive.
P.S please answer only if you know the correct answer
Answers
The monopoly price is set by a monopoly.
This will occur when the firm has no competition as it is the single one in the business.
It will have an absolute market and are free to set prices that can be about the marginal cost.
Since it is the single firm hence, it will take up the complete industry as per the production.
Monopoly market is whereby a single producer is the only one producing the good and they are not facing competition from any other producer.
In this case the company can set prices depending on its marginal cost.
In a competitive market many producers are producing one good to meet the desires of the customers.
In this market the prices are not determined by one firm. It has to be a group of firms.
The correct answer is thus B