A significant difference between monopoly and perfect competition is that:
A) free entry and exit is possible in a monopolized industry but impossible in a competitive industry.
B) competitive firms control market supply, but monopolies do not.
C) the monopolist's demand curve is the industry demand curve, whereas the competitive firm's demand curve is perfectly elastic.
D) profits are driven to zero in a monopolized industry but may be positive in a competitive industry.

Question

Quizplus · Accepted Answer

In a monopoly, the monopolist is the sole provider of the good or service, so the demand curve for the monopolist is the same as the market demand curve. In perfect competition, firms are price takers, and the demand curve they face is perfectly elastic, meaning they can sell any quantity at the market price.

A Significant Difference Between Monopoly and Perfect Competition Is That