Which of the Following Statements Is FALSE

question 11

Multiple Choice

Which of the following statements is FALSE?

• A) In the long run, a monopoly can earn a larger economic profit than can a perfectly competitive firm.
• B) A perfectly competitive market produces more output and charges a lower price than a monopoly.
• C) In a perfectly competitive market, the price is equal to the marginal cost, but in a market with a single-price monopoly, price exceeds marginal cost.
• D) A perfectly competitive firm produces where MR = MC but a monopoly produces where MR > MC.
• E) The consumer surplus is smaller for a market with a monopoly than for a perfectly competitive market.

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Definitions:

Total Variable Cost

The sum of all costs that vary with output level, including costs such as labor and raw materials.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the total quantity of output produced.

Marginal Cost

The price of creating one more unit of a particular product or service.

Marginal Revenue

The additional income generated from selling one more unit of a product or service, crucial for decision-making in production and pricing strategies.