In the long run, a monopolist facing the same cost curves as a perfectly competitive firm will charge a ______________ price than the competitive market and produce a ______________ output.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.alower; higherblower; lowerchigher; higherdhigher; lower
Question
In the long run, a monopolist facing the same cost curves as a perfectly competitive firm will charge a ______________ price than the competitive market and produce a ______________ output.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.alower; higherblower; lowerchigher; higherdhigher; lower
Solution
The correct answer is d) higher; lower.
In the long run, a monopolist will charge a higher price than a perfectly competitive firm. This is because a monopolist is the only seller in the market and has the power to set the price.
In terms of output, a monopolist will produce a lower quantity than a perfectly competitive firm. This is because a monopolist will restrict output to increase the price and maximize profits. In contrast, a perfectly competitive firm will produce where price equals marginal cost, which leads to a higher output.
Similar Questions
Consider a good produced in a competitive market that has external costs. Too ______________ of the good will be produced for economic efficiency and the price will be ______________ than the price that will convince consumers to purchase the efficient amount.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.alittle; lowerblittle; highercmuch; lowerdmuch; higher
In the long run, the monopolist's economic profits will be ______________ than the total of the competitive firms' profits.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.ahigherblowercthe same
Monopolization of a competitive industry to become a cartel will (assuming technology is fixed) lead toSelect an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.alower prices and higher output.bhigher prices and the same level of output.clower output and the same level of price.dhigher prices and lower output.ehigher output and higher prices.
Assume that competitive firms in a competitive market are in long-run equilibrium. Assume a constant cost industry. In the short-run, an increase in demand will cause firm output to ______________ and the market price to ______________.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.aincrease; increasebremain the same; increasecremain the same; remain the samedincrease; remain the same
A monopoly facing a demand curve lower than the average cost curve over wide ranges of output will likely do what?Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.aMake large economic profitsbGo out of businesscProduce where average costs are higher than marginal costsdNot maximize profits
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.