A monopoly firm is different from a competitive firm in that: A. there are many substitutes for a monopolist's product whereas there are no substitutes for a competitive firm's product. B. a monopolist's demand curve is perfectly inelastic whereas a competitive firm's demand curve is perfectly elastic. C. a monopolist can influence market price whereas a competitive firm cannot. D. a competitive firm has a U-shaped average cost curve whereas a monopolist does not.

Question

Maeve Gaines

Business

6 October, 03:13

A monopoly firm is different from a competitive firm in that: A. there are many substitutes for a monopolist's product whereas there are no substitutes for a competitive firm's product. B. a monopolist's demand curve is perfectly inelastic whereas a competitive firm's demand curve is perfectly elastic. C. a monopolist can influence market price whereas a competitive firm cannot. D. a competitive firm has a U-shaped average cost curve whereas a monopolist does not.

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Answers (1)

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Joselyn Cabrera · Answer 1

C. a monopolist can influence market price whereas a competitive firm cannot

Explanation:

A monopoly is a firm that is said to be price makers and they define the market prices through the quantity of the product and by producing more it can sell more and market can be thus explained by the interaction taking between the amount supplied by the firm. They are profit maximizers, single sellers, and have high barriers to entry, the sources are economic barriers are the economics of scale, capital needs, and technological superiority. As they have the market power by allowing price discrimination.