An important difference between a perfectly competitive firm and a monopolist is that (d) the perfectly competitive firm faces a horizontal demand curve and the monopolist faces a downward-sloping demand curve.

a. the perfectly competitive firm tends to be larger. NO. Because there is only one firm in a monopoly, the firm is typically larger than in perfect competition.

b. only the monopolist attempts to maximize profit. NO. All firms, regardless of market type, attempt to maximize their profit.

c. only the perfectly competitive firm maximizes profit. NO. See above.

d. the perfectly competitive firm faces a horizontal demand curve and the monopolist faces a downward-sloping demand curve. YES. A monopoly faces a downward-sloping demand curve. In perfect competition, however, the market determines the price and each firm takes the price as given. Because of this each firm will sell any output at the market price, so the firm's demand curve is horizontal at that price.

e. only the monopolist maximizes profit at the quantity where marginal cost equals marginal revenue: NO. This is also the case for both.