The condition for profit-maximization for competitive firms and monopolies is the same: marginal revenue equals marginal cost. Hence, monopolies are efficient.

Question

Quizplus · Accepted Answer

While both competitive firms and monopolies set output where marginal revenue equals marginal cost, monopolies can still be inefficient because they restrict output to raise prices above marginal costs, leading to a deadweight loss in the market.

The Condition for Profit-Maximization for Competitive Firms and Monopolies Is