Which of the following is a characteristic of a monopoly but not of a competitive market? A) A monopoly contains many firms. B) price marginal cost C) price

Question

Which of the following is a characteristic of a monopoly but not of a competitive market?
A) A monopoly contains many firms.
B) price > marginal cost
C) price < marginal cost
D) price = marginal cost
E) A firm in a monopoly is a price taker.

Quizplus · Accepted Answer

In a monopoly, the price is greater than marginal cost because the monopolist has the power to set prices above marginal costs due to lack of competition. In competitive markets, firms are price takers and typically sell at a price equal to marginal cost.

Which of the Following Is a Characteristic of a Monopoly