Which of the following statements is FALSE?
A) In the long run, a monopoly can earn a larger economic profit than can a perfectly competitive firm.
B) A perfectly competitive market produces more output and charges a lower price than a monopoly.
C) In a perfectly competitive market, the price is equal to the marginal cost, but in a market with a single-price monopoly, price exceeds marginal cost.
D) A perfectly competitive firm produces where MR = MC but a monopoly produces where MR MC.
E) The consumer surplus is smaller for a market with a monopoly than for a perfectly competitive market.

Question

Which of the following statements is FALSE?
A) In the long run, a monopoly can earn a larger economic profit than can a perfectly competitive firm.
B) A perfectly competitive market produces more output and charges a lower price than a monopoly.
C) In a perfectly competitive market, the price is equal to the marginal cost, but in a market with a single-price monopoly, price exceeds marginal cost.
D) A perfectly competitive firm produces where MR = MC but a monopoly produces where MR > MC.
E) The consumer surplus is smaller for a market with a monopoly than for a perfectly competitive market.

Quizplus · Accepted Answer

Monopolies and perfectly competitive firms both produce at the point where marginal revenue (MR) equals marginal cost (MC), not where MR is greater than MC. This is a fundamental principle of profit maximization for firms in various market structures.

Which of the Following Statements Is FALSE