Which of the following would distinguish a competitive firm from a monopolist?
A)the slope of the marginal cost curve faced by the firm
B)the slope of the demand curve faced by the firm
C)the rule of profit maximization followed by the firm
D)the relationship between the firm's marginal revenue and total revenue
E)the existence of diseconomies of scale in production

Question

Quizplus · Accepted Answer

The slope of the demand curve faced by the firm is the key distinguishing factor between a competitive firm and a monopolist. In a competitive market, the demand curve is perfectly elastic (horizontal) while in a monopoly, the demand curve is downward sloping.

Which of the Following Would Distinguish a Competitive Firm from a Monopolist