Identify the following statement's accuracy and briefly state why.All participant in perfect competition is price taker, while in monopoly, only the monopoly power is the price maker while every other participant is a price takerthe similarity between perfect competition and monopoly is the absence of government intervention. Perfect competition is economically efficient as it produces an equilibrium point in which the price and quantity of goods is equal, thus maximising the total surplus. In monopoly, the market is inefficient as monopoly power maximises their revenue by setting their own price. This would create a scenario where consumer surplus will decrease and producer surplus will increases, as well as the presence of deadweight loss, which were the potential gain that is not realised by consumer or producer.

Here, some statements about perfectly competitive market and monopoly market are given to explain…

Answered: Identify the following statement's…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

Identify the following statement's accuracy and briefly state why.

All participant in perfect competition is price taker, while in monopoly, only the monopoly power is the price maker while every other participant is a price taker
the similarity between perfect competition and monopoly is the absence of government intervention.
Perfect competition is economically efficient as it produces an equilibrium point in which the price and quantity of goods is equal, thus maximising the total surplus.
In monopoly, the market is inefficient as monopoly power maximises their revenue by setting their own price. This would create a scenario where consumer surplus will decrease and producer surplus will increases, as well as the presence of deadweight loss, which were the potential gain that is not realised by consumer or producer.

Expert Solution

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions