-Suppose the grocery store market in Brisbane is perfectly competitive. Then one store buys all the others and becomes a single-price monopoly. The figure above shows the relevant demand and cost curves. When the market is perfectly competitive, the price of a kilogram of steak is ________ and when it is a monopoly, the price of a kilogram of steak is ________.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the price equals marginal cost, which is $8. As a monopoly, the price is set where marginal revenue equals marginal cost, leading to a higher price of $12.

-Suppose the Grocery Store Market in Brisbane Is Perfectly Competitive