The perfectly competitive firm charges a price equal to __________ while the monopolist charges a price __________.
A)marginal revenue; equal to marginal cost
B)marginal cost; greater than marginal cost
C)marginal revenue; greater than marginal revenue
D)average total cost; greater than average total cost
E)b and c

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms charge a price equal to marginal cost, as they are price takers. A monopolist, however, has the power to set prices above marginal cost to maximize profits, thus charging a price greater than both marginal cost and marginal revenue. Choices B and C together accurately describe these scenarios.

The Perfectly Competitive Firm Charges a Price Equal to __________