The Differences Between a Competitive Market and a Monopoly Include

question 224

Multiple Choice

The differences between a competitive market and a monopoly include all of these except

• A)excess profits would be competed away in a competitive market, but persist in a monopolistic market.
• B)a competitive market would work toward production of the quantity consumers seek, while a monopolistic market may restrict output to raise short term prices.
• C)a competitive market's cost curves will shift with the market, while a monopoly's cost curves will remain stable.
• D)a competitive market would work toward production of the quantity consumers seek, while a monopolistic market may restrict output to raise long term prices.

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Definitions:

Normal Balance

The side of an account where increases are recorded, which is the debit side for assets and expenses, and the credit side for liabilities, equity, and revenue.

Rent Expense

An expense account that records the cost incurred by a business to utilize property or equipment for operations.

Debit

An accounting entry that increases an asset or expense account, or decreases a liability or equity account, reflected on the left side of an account.

Credit

An accounting entry that either increases a liability or equity account, or decreases an asset or expense account. It is also used to refer to the provision of resources by a credit provider to a borrower.