A monopolist and a perfectly competitive firm both produce an output level where marginal revenue equals marginal cost.

Question

Quizplus · Accepted Answer

This is true. Both a monopolist and a perfectly competitive firm aim to maximize their profits by producing at the point where marginal revenue equals marginal cost. However, the difference lies in the price they can charge for their output. A monopolist can charge a higher price due to the lack of competition, while a perfectly competitive firm must accept the market price. This is true, as both a monopolist and a perfectly competitive firm maximize profits by producing at the output level where marginal revenue equals marginal cost. However, the price and quantity outputs will be different due to the differences in market power and competition.

A Monopolist and a Perfectly Competitive Firm Both Produce an Output