Which of the following is a major difference between a monopolist and firms in perfectly competitive markets?
A) The monopolist may earn short-run profit; firms in perfectly competitive markets cannot.
B) The monopolist maximizes profit; firms in perfectly competitive markets maximize sales.
C) The monopolist is a price taker; firms in other markets are price searchers.
D) The monopolist may earn long-run economic profit; firms in perfectly competitive markets cannot.

Question

Quizplus · Accepted Answer

A monopolist may earn long-run economic profit due to its ability to restrict output and charge higher prices, whereas firms in perfectly competitive markets cannot earn long-run economic profit due to the presence of free entry and exit, leading to zero economic profit in the long run. The other options are not true statements about monopolists and firms in perfectly competitive markets.

Which of the Following Is a Major Difference Between a Monopolist