) Looking at differences between a single firm within a perfectly competitive market and a monopoly,...
) Looking at differences between a single firm within a perfectly competitive market and a monopoly, which of the following is true?
a) A single firm within a perfectly competitive market, sees the entire downward sloping demand curve of the perfectly competitive market.
b) A single firm within the perfectly competitive market can set its price at any level and will not see a change in the demand.
c) Because it is the only producer in the market, the monopoly sees the entire downward sloping demand curve of the market.
d) Because it is the only producer in the market, the monopoly will sell the same amount, no matter what price it charges.
e) A single firm within a perfectly competitive market must be concerned about the impact of the price effect and the quantity effect.
Homework Answers
The demand curve of the monopoly is the demand curve of the entire market as it is the only firm in the market, that supply goods in the market, the answer is "C" Because it is the only producer in the market, the monopoly sees the entire downward sloping demand curve of the market.
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