Which of the following is true for a profit-maximizing competitive firm in the long run but not a monopolist?
A)MC = MR.
B)MC = P.
C)AR = P.
D)Q 0.

Question

Which of the following is true for a profit-maximizing competitive firm in the long run but not a monopolist?
A)MC = MR.
B)MC = P.
C)AR = P.
D)Q > 0.

Quizplus · Accepted Answer

In the long run, a profit-maximizing competitive firm will adjust its output so that its marginal cost (MC) equals the market price (P), as it is a price taker. A monopolist, however, sets its output where marginal cost equals marginal revenue (MC = MR) but can set a price above marginal cost due to its market power.

Which of the Following Is True for a Profit-Maximizing Competitive