Suppose a Perfectly Competitive Firm and a Monopolist Are Both

question 4

Multiple Choice

Suppose a perfectly competitive firm and a monopolist are both charging $5 for their respective products. From this, one can infer that:

• A)the marginal benefit from selling an additional unit of output is $5 for both firms.
• B)the marginal benefit from selling an additional unit of output is $5 for the competitive firm and less than $5 for the monopolist.
• C)the marginal benefit from selling an additional unit of output is less than $5 for both firms.
• D)the competitive firm is charging too much, and the monopolist is charging too little.

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