One Similarity Between a Monopoly and a Firm in Perfect

question 49

Multiple Choice

One similarity between a monopoly and a firm in perfect competition is that both

• A) face the entire market demand curve.
• B) are profit maximizers.
• C) set their selling price.
• D) have market power.
• E) choose their output independent of demand.

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Definitions:

Mixed Cost

An expense that contains both fixed and variable components, changing in total with the level of activity but not in a directly proportional manner.

High-low Method

A method employed in accounting that calculates variable and fixed expenses by analyzing the maximum and minimum activity levels.

Variable Manufacturing Cost

Costs that vary in direct proportion to the changes in production volume, including direct materials, direct labor, and variable manufacturing overhead.

Monthly Production Volume

The total number of units a company manufactures or produces in a month.