One of the Ways That a Perfectly Competitive Firm and a Nondiscriminating

question 36

Multiple Choice

One of the ways that a perfectly competitive firm and a nondiscriminating monopolist are different is that

• A)the marginal cost curve is U-shaped for a perfectly competitive firm but not for a monopolist
• B)P = AR for a perfectly competitive firm but not for a monopolist
• C)P = MR for a perfectly competitive firm but not for a monopolist
• D)the average revenue curve and demand curve are the same for a perfectly competitive firm but not for a monopolist
• E)only the monopolist seeks to maximize profits

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Definitions:

Variable Inputs

Inputs in production that can be adjusted based on the production volume, including labor hours and raw materials, distinguishing them from inputs that remain constant.

Labor

The effort involving both bodily and intellectual activities applied in generating goods and services.

AVC

Average Variable Cost, the total variable cost divided by the quantity of output produced.

AFC

Average fixed cost, or the total fixed costs divided by the quantity of output produced, indicating how fixed costs per unit change with production levels.