When maximizing profit,the perfect competitor __ produces at the output at which MC = MR;the monopolist produces at the output at which MC = MR.

A) always;always
B) sometimes;sometimes
C) always;sometimes
D) sometimes;always

Question

When maximizing profit,the perfect competitor ______ produces at the output at which MC = MR;the monopolist ____ produces at the output at which MC = MR.

A) always;always
B) sometimes;sometimes
C) always;sometimes
D) sometimes;always

Jordan Wakim · Accepted Answer

Final Answer : A, Explanation :  A perfect competitor always produces at the output at which MC = MR in order to maximize profit. This is because a perfect competitor cannot influence the market price and must therefore take the price as given. The price is equal to the marginal revenue (MR) for a perfect competitor, so setting MC equal to MR ensures that the production level will result in the maximum profit.On the other hand, a monopolist sometimes produces at the output at which MC = MR to maximize profit. This is because a monopolist has market power and can influence the market price by adjusting its output. Setting MC = MR ensures that the monopolist is producing at the level that will result in the maximum profit. However, a monopolist may choose to produce at a lower output level in order to increase market power, or at a higher output level to increase total revenue even if it means accepting lower profit.

When maximizing profit,the perfect competitor __ produces at the output at which MC = MR;the monopolist produces at the output at which MC = MR.

A) always;always
B) sometimes;sometimes
C) always;sometimes
D) sometimes;always

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Learning Objectives

Related questions

When maximizing profit,the perfect competitor ______ produces at the output at which MC = MR;the monopolist ____ produces at the output at which MC = MR.A) always;alwaysB) sometimes;sometimesC) always;sometimesD) sometimes;always

Definitions

Learning Objectives

Learning Objectives

Related questions

When maximizing profit,the perfect competitor __ produces at the output at which MC = MR;the monopolist produces at the output at which MC = MR.

A) always;always
B) sometimes;sometimes
C) always;sometimes
D) sometimes;always