The main difference between a monopoly and a competitive firm is that
A)they have differently-shaped cost curves.
B)a monopoly can change its output, whereas a competitive firm cannot.
C)with a monopoly there is a market demand, whereas with a competitive firm there is only firm demand.
D)a monopoly is not concerned with market price.
E)a monopoly can affect market price, whereas a competitive firm cannot.

Question

Quizplus · Accepted Answer

The main difference between a monopoly and a competitive firm is that a monopoly has the ability to affect market price, whereas a competitive firm cannot. This is due to the fact that a monopoly is the sole producer in the market, giving it control over the supply of the product and therefore the ability to set a higher price. In contrast, a competitive firm is one of many producers in the market and must accept the prevailing market price in order to sell its product.

The Main Difference Between a Monopoly and a Competitive Firm