Which of the Following Statements Is FALSE

question 163

Multiple Choice

Which of the following statements is FALSE?

• A) A perfectly competitive market produces more output and charges a lower price than a monopoly.
• B) A perfectly competitive firm produces where MR = MC but a monopoly produces where MR > MC.
• C) In a perfectly competitive market, the price is equal to the marginal cost, but in a market with a single-price monopoly, price exceeds marginal cost.
• D) The consumer surplus is smaller for a market with a monopoly than for a perfectly competitive market.
• E) In the long run, a monopoly can earn a larger economic profit than can a perfectly competitive firm.

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Definitions:

Spin-Off

The distribution of shares in a subsidiary to existing parent company shareholders.

Subsidiary

A company that is completely or partly owned and partly or entirely controlled by another company, known as the parent company.

Shareholders

Individuals or entities that own shares in a corporation, thus holding a portion of the corporation's ownership.

Poison Pill

A defensive strategy used by companies to deter hostile takeovers by making the company less attractive to the potential acquirer.