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Author Question: What are the main differences between a monopolist and a perfectly competitive ... (Read 58 times)

soccerdreamer_17

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on: Jun 30, 2018
What are the main differences between a monopolist and a perfectly competitive firm?

Question 2

Why is there a supply point and not a supply curve for a monopolist?
 a. A monopolist cannot affect the market price by changing its supply.
  b. A monopolist produces a homogeneous product having similar substitutes.
  c. A monopolist equates the price which it charges with its marginal cost.
  d. There is only one quantity and price at which a monopolist operates.
  e. A monopolist supplies to a large number of consumers.


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alvinum

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Reply #1 on: Jun 30, 2018
Answer to Question 1

A monopolist is a price maker, while a competitive firm is a price taker. A competitive firm can therefore change its output level without any impact on market price, while a change in production by a monopolist implies a change in the price of the product. This is because, being the sole producer, the market demand curve is the demand curve the monopolist perceives. A competitive firm on the other hand perceives a demand curve horizontal at the market price.

Answer to Question 2

d


soccerdreamer_17

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Reply 2 on: Jun 30, 2018
Thanks for the timely response, appreciate it

FergA

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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