Comparing the monopolist to the perfect competitor,
A)only the monopolist produces where MC equals MR.
B)both have downward-sloping demand curves.
C)only the perfect competitor will make an economic profit in the long run.
D)only the monopolist will make an economic profit in the long run.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms are price takers and can only make normal profits in the long run due to free entry and exit in the market. A monopolist, however, faces no competition and can set prices above marginal costs, potentially earning economic profits in the long run.

Comparing the Monopolist to the Perfect Competitor