When compared to monopoly and monopolistic competition, the perfectly competitive market structure
A) has somewhat higher barriers to entry
B) produces the lowest output at the lowest prices
C) is the least efficient
D) gives the greatest output at the lowest prices
E) earns the highest normal profit

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms produce at the point where price equals marginal cost, which leads to the greatest output at the lowest prices. This is due to the fact that there are many firms, no barriers to entry, and products are homogenous, leading to efficiency and competitive pricing.

When Compared to Monopoly and Monopolistic Competition, the Perfectly Competitive