A perfectly competitive firm hires more resources than a monopolist firm.

Question

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In a perfectly competitive market, firms have no market power and must accept the market price for their output. Therefore, they hire resources up to the point where the marginal cost of the last unit of labor equals the market wage. On the other hand, a monopolist firm has market power and can choose its level of output and the amount of resources it hires based on maximizing profits. This may result in the monopolist hiring fewer resources than a perfectly competitive firm would in the same market.

A Perfectly Competitive Firm Hires More Resources Than a Monopolist