Both a perfectly competitive firm and a monopolist:

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Both a perfectly competitive firm and a monopolist maximise profit by setting marginal cost equal to marginal revenue. In a perfectly competitive market, the firm is a price taker, meaning it has no control over the market price and must accept the equilibrium price determined by the market. In contrast, a monopolist has market power and can choose the price it charges, but it still sets the profit-maximising quantity where marginal revenue equals marginal cost. Option A is incorrect as a perfectly competitive firm may earn zero economic profit in the long run, while a monopolist may earn an economic profit in the long run. Option C is incorrect as a monopolist maximises profit by setting output where marginal revenue equals marginal cost, not average total cost. Option D is incorrect as a monopolist is a price maker, while a perfectly competitive firm is a price taker.

Both a Perfectly Competitive Firm and a Monopolist