The perfectly competitive firm takes the market price as given, while the monopolist chooses an output level that maximizes profit.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms are price takers and must accept the market price. A monopolist, however, is the sole provider of a good or service and can choose the output level that maximizes profit, thereby influencing the price.

The Perfectly Competitive Firm Takes the Market Price as Given