The Main Differences Between a Competitive Firm and a Monopoly

question 212

Multiple Choice

The main differences between a competitive firm and a monopoly are:
(i) competitive firms do not have to worry about the price effect lowering their total revenue
(ii) marginal revenue for a competitive firm equals price, while marginal revenue for a monopoly is less than the price it is able to charge
(iii) monopolies must lower their price in order to sell more of their product, while competitive firms do not

• A)(i) and (ii)
• B)(ii) and (iii)
• C)(i) and (iii)
• D)(i), (ii) and (iii)

Identify the optimal level of R&D expenditure for firms based on marginal cost and benefit analysis.

Grasp how successful product innovations increase consumer utility and spending efficiency.

Analyze the inverted-U theory relationship between R&D expenditures and industry concentration.

Distinguish between the concepts of diffusion, creative destruction, and technological advancements.

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