If a Perfectly Competitive Firm and a Single-Price Monopolist Face

question 158

Multiple Choice

If a perfectly competitive firm and a single-price monopolist face the same demand and cost curves, then

• A)the competitive firm will attain resource-allocative efficiency, but the monopolist will not.
• B)the competitive firm will attain resource-allocative efficiency, but the monopolist may or may not, depending upon the demand for its product.
• C)the competitive firm will not attain resource-allocative efficiency, but the monopolist will.
• D)both the competitive firm and the monopolist will attain resource-allocative efficiency.
• E)neither the competitive firm nor the monopolist will attain resource-allocative efficiency.

---

Definitions:

Politically Influential

Describes individuals or groups that hold significant power to affect public policy or government actions.

Import Protections

Measures such as tariffs and quotas that countries implement to protect their domestic industries from foreign competition.

Consumer Surplus

The disparity between the amount consumers are prepared to spend on a product or service and the actual price they pay.

Import-Competing Industries

Sectors within an economy that produce goods or services in direct competition with imports, often affected by trade policies.