A monopoly firm is different from a competitive firm in that:
A) there are many substitutes for a monopolist's product whereas there are no substitutes for a competitive firm's product.
B) a monopolist's demand curve is perfectly inelastic whereas a competitive firm's demand curve is perfectly elastic.
C) a monopolist can influence market price whereas a competitive firm cannot.
D) a competitive firm has a U-shaped average cost curve whereas a monopolist does not.

Question

Quizplus · Accepted Answer

A monopoly firm can influence the market price because it is the sole provider of a product or service, whereas a competitive firm is a price taker due to the presence of many other firms offering similar products.

A Monopoly Firm Is Different from a Competitive Firm in That