One difference between perfectly competitive markets and a single-price monopoly is that
A)marginal revenue equals marginal cost for perfectly competitive firms, but not for single-price monopolists.
B)marginal cost equals average variable cost for perfectly competitive firms but not for single-price monopolists.
C)price equals minimum average total cost for single-price monopolists but not for perfectly competitive firms.
D)marginal revenue equals price for perfectly competitive firms, but not for single-price monopolists.
E)none of the above

Question

Quizplus · Accepted Answer

In perfectly competitive markets, marginal revenue equals price because firms are price takers. In a single-price monopoly, marginal revenue is less than price because the monopolist must lower the price to sell additional units.

One Difference Between Perfectly Competitive Markets and a Single-Price Monopoly