Which of the Following Is a Characteristic Shared by a Perfectly

question 83

Multiple Choice

Which of the following is a characteristic shared by a perfectly competitive firm and a monopoly?

• A)Each must lower its price to sell more output.
• B)Each sets a price for its product that will maximise its revenue.
• C)Each maximises profits by producing a quantity for which marginal revenue equals marginal cost.
• D)Each maximises profits by producing a quantity for which price equals marginal cost.

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Definitions:

Market Equilibrium

The condition in which a market's supply and demand balance each other, and as a result, prices become stable.

Consumer Surplus

The gap between the aggregate sum consumers can and are willing to spend on a good or service versus the amount they really spend.

Equilibrium

The state in which market supply and demand balance each other, resulting in stable prices and quantities.

Market Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices and quantities.