Which of the following statements is true for both a competitive market and a single-price monopoly?
A) The firm maximizes profit by producing the quantity at which marginal revenue equals marginal cost.
B) The firm can make an economic profit in the long run.
C) The price is set where the supply curve and demand curve intersect.
D) The firm always produces at the lowest possible long-run average cost.

Question

Quizplus · Accepted Answer

Both a competitive market and a single-price monopoly will maximize profit by producing the quantity at which marginal revenue equals marginal cost. In a competitive market, this results in the equilibrium price and quantity. In a single-price monopoly, this results in a higher price and lower quantity than in a competitive market.

Which of the Following Statements Is True for Both a Competitive