Figure 11-5
-In which of the following ways is a monopolist different from a perfect competitor?
A)Average cost will continually drop as output expands.
B)Price is above marginal revenue.
C)Average total cost equals average fixed costs plus average variable costs.
D)The demand curve for the industry has a negative slope.

Question

Figure 11-5 
-In which of the following ways is a monopolist different from a perfect competitor?
A)Average cost will continually drop as output expands. 
B)Price is above marginal revenue. 
C)Average total cost equals average fixed costs plus average variable costs. 
D)The demand curve for the industry has a negative slope.

Quizplus · Accepted Answer

In a monopoly, the price is set above marginal revenue because the monopolist has market power and faces a downward-sloping demand curve, unlike a perfect competitor who is a price taker with price equal to marginal revenue.

Figure 11-5 -In Which of the Following Ways Is a Monopolist Different