The difference between a monopolist and a monopolistic competitor is that: A. a
ID: 1232703 • Letter: T
Question
The difference between a monopolist and a monopolistic competitor is that:A. a monopolist equates marginal revenue and marginal cost while a monopolistic competitor equates price and marginal cost.
B. the average total cost curve of a monopolistic competitor is tangent to the demand curve in long-run equilibrium, but the average total cost curve of a monopolist can be in a position below the price in long-run equilibrium.
C. the average total cost curve of a monopolist is tangent to the demand curve in long-run equilibrium, but the average total cost curve of a monopolistic competitor can be in a position below the price in long-run equilibrium.
D. the average total cost curve of a monopolist is tangent to the demand curve in long-run equilibrium, but the average total cost curve of a monopolistic competitor can be in a position above the price in long-run equilibrium.
Explanation / Answer
B. the average total cost curve of a monopolistic competitor is tangent to the demand curve in long-run equilibrium, but the average total cost curve of a monopolist can be in a position below the price in long-run equilibrium.