A Big Difference Between a Competitive Firm and a Monopolist

question 27

Multiple Choice

A big difference between a competitive firm and a monopolist is that a monopolist

• A) does not charge a price equal to marginal revenue.
• B) does not set marginal revenue equal to marginal cost to maximize profits.
• C) does not try to maximize profits.
• D) can always make positive economic profits.
• E) cannot set its price at the market price.

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Definitions:

Punitive Damages

Financial compensation awarded to a plaintiff that goes beyond what is necessary to compensate for losses, intended to punish the defendant for egregious wrongdoing.

Punitive Damages

Monetary compensation awarded to an aggrieved party that exceeds simple compensation and is intended to punish the wrongdoer.

Anticipatory Breach

Anticipatory breach occurs when one party to a contract indicates, either verbally or through actions, that they will not fulfill their contractual obligations, leading to an early breach of contract.

Contractual Obligations

Duties that parties are legally bound to perform as per the terms of a contract.