The profit-maximizing price of the monopolist compared to the perfectly competitive industry in the above figure are, respectively

Question

Quizplus · Accepted Answer

In a monopolistic market, the profit-maximizing price is higher because the monopolist sets the price where marginal cost (MC) equals marginal revenue (MR), which is typically at a lower quantity and higher price than in a perfectly competitive market. In a perfectly competitive market, the price is determined by the intersection of the supply and demand curves, leading to a lower price and higher quantity sold. Therefore, without seeing the specific figure, the general principle is that the monopolist's price (P1) is higher than the competitive price (P3).

The Profit-Maximizing Price of the Monopolist Compared to the Perfectly