which of the following statements about price and marginal cost in competitive and monopolized markets is...
which of the following statements about price and marginal cost in competitive and monopolized markets is true? (a) in competitive markets, price exceeds marginal cost; in monopolized markets, price equals marginal cost (b) in competitive markets, price equals marginal cost; in monopolized markets, price is less than marginal cost (c) in competitive markets, price exceeds marginal cost; in monopolized markets, price exceeds marginal cost (d) in competitive markets, price equals marginal cost; in monopolized markets, price equals marginal cost (e) in competitive markets, price equals marginal cost; in monopolized markets, price exceeds marginal cost
Homework Answers
Profit maximizing condition under competitive market is P=MC. And Profit maximizing condition under monopolized market is MR=MC.
This implies in competitive markets , price equals marginal cost and in monopolized markets price exceeds marginal cost.
Hence, option(E) is correct.
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