Exhibit 9.11

-Refer to Exhibit 9.12,which shows the cost and revenue curves faced by a profit-maximizing monopolist.A perfectly competitive industry would produce _____
A)output Q.
B)output Q'.
C)less than Q.
D)more than Q'.
E)between Q and Q'.

Question

Exhibit 9.11
 
-Refer to Exhibit 9.12,which shows the cost and revenue curves faced by a profit-maximizing monopolist.A perfectly competitive industry would produce _____
A)output Q. 
B)output Q'. 
C)less than Q. 
D)more than Q'. 
E)between Q and Q'.

Quizplus · Accepted Answer

A perfectly competitive industry would produce at the point where price equals marginal cost, which is represented by output Q'. This is because, in perfect competition, firms produce where P = MC to maximize welfare, unlike a monopolist who produces less (Q) to maximize profit.

Exhibit 9.11 -Refer to Exhibit 9.12,which Shows the Cost and Revenue Curves