A monopolist and a perfect competitor can both sell 10 units of a good they produce for $5 a piece.Which of the following is not true?
A)The perfect competitor can sell unit 11 for $5.
B)The perfect competitor's MR curve is a straight line at $5.
C)The monopolist can sell unit 11 for $5.
D)The monopolist has a decreasing marginal revenue curve.
E)None of the above.

Question

Quizplus · Accepted Answer

A monopolist faces a downward-sloping demand curve, meaning to sell more units, they typically have to lower the price. Therefore, the monopolist cannot necessarily sell the 11th unit for $5 if they are already selling 10 units at that price, unlike a perfect competitor who is a price taker and can sell additional units at the market price.

A Monopolist and a Perfect Competitor Can Both Sell 10