In perfect competition,the firm produces the output such that _____,and in monopoly,the firm produces the output such that _____. A)P MR = MC;P = MR = MC B)P = MR = MC;P MR = MC D)P = MR = MC;P = MR = MC

Question

In perfect competition,the firm produces the output such that _____,and in monopoly,the firm produces the output such that _____.
A)P > MR = MC;P = MR = MC
B)P = MR = MC;P < MR = MC
C)P = MR = MC;P > MR = MC
D)P = MR = MC;P = MR = MC

Quizplus · Accepted Answer

In perfect competition, a firm produces where price (P) equals marginal revenue (MR) and marginal cost (MC), because the firm is a price taker. In a monopoly, the firm has market power, so it produces where marginal revenue equals marginal cost (MR = MC), but due to its pricing power, price (P) is greater than marginal revenue.

In Perfect Competition,the Firm Produces the Output Such That _____,And