Consider Monopoly, Monopolistic Competition, and Perfect Competition

question 97

Multiple Choice

Consider monopoly, monopolistic competition, and perfect competition. In which of these three market structures does a profit-maximizing firm charge a price that exceeds marginal cost?

• A)monopoly only
• B)monopoly and monopolistic competition only
• C)monopoly, monopolistic competition, and perfect competition
• D)The answer cannot be determined without knowing whether the market is in the long run or short run.

---

Definitions:

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that are becoming the global standard for the preparation of public company financial statements.

Statement of Financial Position

A financial statement detailing an organization's assets, liabilities, and equity at a specific point in time, known as the balance sheet.

Shareholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the ownership interest of shareholders.

SFAS No.123

A Statement of Financial Accounting Standards providing guidance on stock-based compensation, requiring companies to expense the cost of employee services received in exchange for an award of equity instruments.