Which of the following statements about monopoly equilibrium and perfectly competitive equilibrium is INCORRECT?
A) Price is greater than marginal cost in monopoly, and price equals marginal cost in perfect competition.
B) When a monopoly exists, the consumer surplus is less than if the market were perfectly competitive.
C) Monopoly output will be less than the output of a comparable perfectly competitive industry.
D) In the long run, economic profits are driven to zero in both a monopoly and a perfectly competitive market.

Question

Quizplus · Accepted Answer

In the long run, economic profits are driven to zero in a perfectly competitive market due to free entry and exit, but a monopoly can maintain positive economic profits due to barriers to entry.

Which of the Following Statements About Monopoly Equilibrium and Perfectly