The Reason a Monopoly Produces Less Than a Competitive Industry

question 77

Multiple Choice

The reason a monopoly produces less than a competitive industry with identical costs is that

• A)in a competitive industry there are more firms, which leaves more money available for production.
• B)There is not enough information to answer this question.
• C)competitive firms' marginal revenue equals marginal cost, so the industry produces at the point at which demand and marginal cost cross instead of the point at which marginal revenue and marginal cost cross.
• D)monopolies are usually regulated industries, and the government limits production.
• E)production costs are always higher for monopolies than for competitive firms.

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