Which of the Following Statements About Price and Marginal Cost

question 10

Multiple Choice

Which of the following statements about price and marginal cost in competitive and monopolised markets is true?

• A) In competitive markets, price equals marginal cost; in monopolised markets, price exceeds marginal cost.
• B) In competitive markets, price equals marginal cost; in monopolised markets, price equals marginal cost.
• C) In competitive markets, price exceeds marginal cost; in monopolised markets, price exceeds marginal cost.
• D) In competitive markets, price exceeds marginal cost; in monopolised markets, price equals marginal cost.

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Definitions:

Merchant Wholesaler

A business that buys goods in large quantities from manufacturers and resells them to retailers or other businesses.

Full-Service

Offering a complete range of services to meet all customer needs in a particular area, without requiring them to go elsewhere.

Merchant Wholesalers

Independently owned firms that take title to the merchandise they handle.

Take Title

The act of taking legal ownership of a particular piece of property or goods.