Which of the following statements is FALSE?
A) A perfectly competitive market produces more output and charges a lower price than a monopoly.
B) A perfectly competitive firm produces where MR = MC but a monopoly produces where MR MC.
C) In a perfectly competitive market, the price is equal to the marginal cost, but in a market with a single-price monopoly, price exceeds marginal cost.
D) The consumer surplus is smaller for a market with a monopoly than for a perfectly competitive market.
E) In the long run, a monopoly can earn a larger economic profit than can a perfectly competitive firm.

Question

Which of the following statements is FALSE?
A) A perfectly competitive market produces more output and charges a lower price than a monopoly.
B) A perfectly competitive firm produces where MR = MC but a monopoly produces where MR > MC.
C) In a perfectly competitive market, the price is equal to the marginal cost, but in a market with a single-price monopoly, price exceeds marginal cost.
D) The consumer surplus is smaller for a market with a monopoly than for a perfectly competitive market.
E) In the long run, a monopoly can earn a larger economic profit than can a perfectly competitive firm.

Quizplus · Accepted Answer

A monopoly produces where marginal revenue (MR) equals marginal cost (MC), not where MR > MC. This is the point where profit is maximized for both monopolies and perfectly competitive firms.

Which of the Following Statements Is FALSE