A price-taking firm and a monopoly firm are alike in that:
A) price equals marginal revenue for both.
B) both maximize profits by choosing an output where marginal revenue equals marginal cost.
C) price exceeds marginal cost at the profit-maximizing level of output for both.
D) in the long run, both earn zero economic profits.

Question

Quizplus · Accepted Answer

Both a price-taking firm and a monopoly firm maximize profits by producing the quantity where marginal revenue equals marginal cost.

A Price-Taking Firm and a Monopoly Firm Are Alike in That