In What Way Are a Price-Taking Firm and a Monopoly

question 113

Multiple Choice

In what way are a price-taking firm and a monopoly firm alike?

• A) Price exceeds marginal cost at the profit-maximizing level of output for both.
• B) Both maximize profits by choosing an output where marginal revenue equals marginal cost, provided that price exceeds average variable cost.
• C) In the long run, both earn zero economic profits.
• D) Price equals marginal revenue for both.

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