Under both perfect competition and monopoly, a firm:
A) is a price taker.
B) is a price maker.
C) will shut down in the short-run if price falls short of average total cost.
D) sets marginal cost equal to marginal revenue.

Question

Quizplus · Accepted Answer

Under both perfect competition and monopoly, firms set marginal cost (MC) equal to marginal revenue (MR) to maximize profits. This is a fundamental principle of profit maximization in economics.

Under Both Perfect Competition and Monopoly, a Firm