Which of the Following Statements Correctly Differentiates Between a Monopoly

question 243

Multiple Choice

Which of the following statements correctly differentiates between a monopoly and a perfectly competitive firm?

• A) A perfectly competitive firm faces an upward-sloping demand curve, whereas a monopoly faces a horizontal demand curve.
• B) A perfectly competitive firm sets its product price at its marginal cost, whereas a monopoly sets the price above its marginal cost.
• C) A perfectly competitive firm faces a horizontal demand curve, whereas a monopoly faces an upward sloping-demand curve.
• D) A perfectly competitive firm sets its product price above its marginal cost, whereas a monopoly sets its product price equal to its marginal cost.

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Definitions:

Medium Of Exchange

An intermediary instrument used to facilitate the sale, purchase, or trade of goods between parties.

Commodity Money

Money whose value comes from a commodity of which it is made, such as gold and silver, used historically as a medium of exchange.

Token Money

Money whose face value exceeds its cost of production.

Coins

Pieces of metal issued by the government as money, typically used as lower-value currency.