Which of the following is not a difference between a monopoly and a competitive firm?
A)An industry that is monopolized will produce less than the same industry that is competitive.
B)Monopolies always earn economic profits, whereas competitive firms never do.
C)For a monopoly, price is greater than marginal revenue, whereas price and marginal revenue are the same for a competitive firm.
D)There is a deadweight loss associated with a monopoly, whereas a competitive industry suffers no deadweight loss.
E)A competitive firm produces at minimum average total cost in a long-run equilibrium, whereas this is not necessarily the case for a monopoly.

Question

Quizplus · Accepted Answer

This statement is incorrect as competitive firms can also earn economic profits in the short run. The correct statement is that in the long run, competitive firms earn zero economic profits due to the entry and exit of firms in the industry.

Which of the Following Is Not a Difference Between a Monopoly