Answered: These are statements comparing monopoly…

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter8: Monopoly

Section: Chapter Questions

Problem 12SQP

See similar textbooks

Related questions

Question

These are statements comparing monopoly with perfect competition. Which of the following statements is/are false?

Group of answer choices

1. A a perfectly competitive industry faces a horizontal straight line demand curve whereas a monopoly faces a downward sloping demand curve.

2. A perfectly competitive firm faces a small fraction of the industry demand curve whereas a monopoly faces the entire market demand curve.

3. A perfectly competitive firm can only set quantities; a monopoly can set both price and quantity, although once it chooses a price (quantity), the other variable, quantity (price), is determined by the demand curve it faces.

4. A perfectly competitive equilibrium is efficient; a monopoly equilibrium (single price monopolist) is inefficient.

5. A perfectly competitive firm necessarily earns zero economic profit in a long run equilibrium; a monopoly typically earns a super-normal profit in a long run equilibrium.

AI-Generated Solution

AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.