If a monopolist produces 100 units of output at a market price of $5 per unit with marginal revenue per unit equaling $4,we would expect that if the monopolist's good were provided under pure competition,quantity would be:

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Under pure competition, the price is equal to the marginal cost, which in the long run equals the minimum average total cost. Therefore, the price would likely be lower than $5, and the quantity supplied would be higher than 100 units, as firms would have an incentive to enter the industry and produce until price equals marginal cost. In pure competition, marginal revenue equals price, as each firm is a price taker and cannot affect the market price. Thus, MR = price would also hold true.

If a Monopolist Produces 100 Units of Output at a Market