How Do Competitive Firms and Monopolists Differ

question 205

Multiple Choice

How do competitive firms and monopolists differ

• A)A competitive firm cannot choose its level of output; a monopolist chooses its level of output.
• B)A competitive firm's short-run profit is always zero; a monopolist can have a positive short-run profit.
• C)A competitive firm's marginal-revenue curve is horizontal; a monopolist's marginal-revenue curve is downward sloping.
• D)A competitive firm sets price equal to marginal cost; a monopolist sets price equal to marginal revenue.

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Definitions:

Elaboration-Likelihood Model

A theory suggesting two primary pathways (central and peripheral) that influence the ability of a message to persuade.

Central Route

In persuasion theory, a cognitive route of information processing that involves deliberate analysis of the attributes and content of the message.

Peripheral Route

An approach to persuasion that influences people by incidental cues, such as a speaker's attractiveness or non-central message features, differing in focus from the central route.

Peripheral Route

A method of persuasion that relies on superficial cues rather than the substantive quality of the message, part of the Elaboration Likelihood Model of persuasion.