Use the figure below to answer the following questions.

Figure 13.3.1
-Refer to Figure 13.3.1.If this market were perfectly competitive,the output level would exceed the single-price monopoly output level by
A)20 units.
B)40 units.
C)60 units.
D)zero.The perfectly competitive firm and the single-price monopoly produce the same quantity because marginal cost is constant.
E)30 units.

Question

Use the figure below to answer the following questions.
  
Figure 13.3.1
-Refer to Figure 13.3.1.If this market were perfectly competitive,the output level would exceed the single-price monopoly output level by
A)20 units. 
B)40 units. 
C)60 units. 
D)zero.The perfectly competitive firm and the single-price monopoly produce the same quantity because marginal cost is constant. 
E)30 units.

Quizplus · Accepted Answer

The perfectly competitive firm produces at the point where marginal cost equals price, which is at an output level of 60 units. The single-price monopoly produces at the point where marginal revenue equals marginal cost, which is at an output level of 20 units. Therefore, the perfectly competitive output level exceeds the single-price monopoly output level by 60 - 20 = 40 units.

Use the Figure Below to Answer the Following Questions