A monopoly:
A) takes the market price as given.
B) determines its own price, given its demand curve.
C) achieves nearly the same resource allocation efficiency as perfect competition, because it competes in the general marketplace for dollars.
D) is characterized by A and B.

Question

Quizplus · Accepted Answer

A monopoly determines its own price based on its demand curve. It has market power and can charge a higher price than what would prevail under perfect competition. It does not take the market price as given. It also does not achieve the same resource allocation efficiency as perfect competition because it restricts output to maximize profits.

A Monopoly