Which of the following statements is correct for both a monopolist and a perfectly competitive firm?

Question

Quizplus · Accepted Answer

Statement i) ("The firm maximizes profits by producing the quantity at which marginal cost equals marginal revenue") is correct for both a monopolist and a perfectly competitive firm. Statement ii) ("The demand curve the firm faces is downward sloping") only applies to a monopolist. Statement iii) ("In the short-run, the firm may earn positive economic profits, zero economic profits or negative economic profits") only applies to a monopolist. Statement iv) ("In the long-run, the firm earns zero economic profits") is correct for both a monopolist and a perfectly competitive firm. Therefore, only statement i) and iv) are correct for both types of firms.

Which of the Following Statements Is Correct for Both a Monopolist