The profit maximizing behavior of a monopoly is different from that of a perfectly competitive firm in that a monopoly can
A) only choose the desired output, while a competitive firm can control only price.
B) only choose the desired price, while a competitive firm can control only output.
C) control the position of its demand schedule, but a competitive firm cannot.
D) control the desired price and output to maximize profits, but a perfectly competitive firm can only choose the desired output.

Question

Quizplus · Accepted Answer

A monopoly has control over the market and can set the price and output level that results in maximum profit. In contrast, a perfectly competitive firm can only choose the desired output and has no control over the market price.

The Profit Maximizing Behavior of a Monopoly Is Different from That