The monopolist and the perfect competitor are similar in that
A)both operate at peak efficiency.
B)both can make a profit in the long run.
C)both types of markets have no barriers to entry.
D)both try to maximize profits.

Question

Quizplus · Accepted Answer

Both the monopolist and the perfect competitor try to maximize profits. However, they differ in their ability to achieve this goal. The monopolist can restrict output and charge higher prices due to lack of competition, while the perfect competitor has no market power and must accept the prevailing market price. Therefore, the monopolist may earn higher profits in the short run, but the perfect competitor is more likely to earn only normal profits in the long run. Additionally, the perfect competition market structure has no barriers to entry, while the monopolist may face legal or economic barriers.

The Monopolist and the Perfect Competitor Are Similar in That