A Difference Between a Perfectly Competitive Industry and a Monopoly

question 350

Multiple Choice

A difference between a perfectly competitive industry and a monopoly is that

• A) in the long run, firms in a perfectly competitive industry make zero economic profit and a monopoly can make an economic profit.
• B) a firm in a perfectly competitive industry can perfectly price discriminate but a monopoly cannot.
• C) only monopolies have an incentive to maximize profit.
• D) perfectly competitive firms can have a public franchise.
• E) a barrier to entry protects perfectly competitive firms in the short run and protects a monopoly in the long run.

---

Definitions:

Job-Order Costing

An accounting method used to assign costs to specific jobs or orders, tracking expenses in relation to each job's production costs.

Manufacturing Overhead

All manufacturing costs other than direct materials and direct labor, including maintenance, utilities, and depreciation of production facilities.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials, labor, and overhead costs, but excluding indirect expenses such as distribution costs.

Balance Sheet

Balance Sheet is a financial statement that provides a snapshot of a company's financial condition at a specific time, detailing assets, liabilities, and shareholders' equity.