Compared to perfect competition in the long run, monopoly has: A

Marketing Jan 12, 2021

Compared to perfect competition in the long run, monopoly has:

A. more choices of products for consumers.

B. more efficiency.

C. lower prices.

D. higher output.

E. price greater than marginal revenue.

Expert Solution

The correct option is

E. price greater than marginal revenue.

The monopolist faces a downward-sloping demand curve i.e average revenue curve or the demand curve lies above the marginal revenue curve. The monopolist produces at a point where its marginal cost is equal to the marginal revenue; but charges a corresponding price for this quantity on the average revenue curve.

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