Which of the Following Is Not a Difference Between Monopolies

question 147

Multiple Choice

Which of the following is not a difference between monopolies and perfectly competitive markets?

• A)Monopolies can earn profits in the long run while perfectly competitive firms break even.
• B)Monopolies charge a price higher than marginal cost while perfectly competitive firms charge a price equal to marginal cost.
• C)Monopolies choose to produce the quantity at which marginal revenue equals marginal cost while perfectly competitive firms do not.
• D)Monopolies face downward sloping demand curves while perfectly competitive firms face horizontal demand curves.

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Definitions:

Total Cost

The sum of all costs associated with producing or acquiring goods and services, including direct and indirect expenses.

Cost-Plus Approach

A pricing strategy where a fixed percentage or a fixed amount is added to the cost of the product to determine its selling price.

Markup

An additional amount included with the buying price of items to ensure coverage of operational expenses and earn a profit.

Total Cost Method

An inventory valuation method that determines the ending inventory and cost of goods sold by considering all costs of production as product costs.