Which of the following statements correctly differentiates between a monopoly and a perfectly competitive firm?
A) A perfectly competitive firm faces an upward sloping demand curve, whereas a monopoly faces a horizontal demand curve.
B) A perfectly competitive firm sets its product price at its marginal cost, whereas a monopoly sets the price above its marginal cost.
C) A perfectly competitive firm faces a horizontal demand curve, whereas a monopoly faces an upward sloping demand curve.
D) A perfectly competitive firm sets its product price above its marginal cost, whereas a monopoly sets its product price equal to its marginal cost.
B
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Which of the following goods is directly counted in GDP?
A) the pepperoni that Pizza Hut purchases for its pizzas B) the cheese that Pizza Hut purchases for its pizzas C) the large Pizza Hut pizza purchased by a family for dinner D) the boxes that Pizza Hut purchases to box its pizzas
To maintain a price above the equilibrium price,
a. demand must increase. b. supply must increase. c. price must be regulated. d. demand must decrease.
Which of the following provides the best explanation of why low-income countries generally remain poor?
a. Their political environment and policies often discourage productive activity and reduce the potential gains from specialization and exchange. b. They are oppressed by developed nations that benefit from the cheap goods available from countries with low wage rates. c. They are poorly endowed with natural resources, which are essential for long-term rapid growth. d. When the average income level is low, workers have little incentive to earn higher incomes.
The term ______ is used to describe the common pattern whereby each marginal unit of a consumed good provides less of an addition to utility than the previous unit.
A. marginal utility pattern B. marginal income utility C. diminishing marginal utility D. decreasing marginal utility