Consider monopoly, monopolistic competition, and perfect competition. In which of these three market structures does a profit-maximizing firm charge a price that exceeds marginal cost?
a. monopoly only
b. monopoly and monopolistic competition only
c. monopoly, monopolistic competition, and perfect competition
d. The answer cannot be determined without knowing whether the market is in the long run or short run.
b
You might also like to view...
"I'd rather have $100 now than wait for $100 six months from now." This person
A) displays a negative rate of time preference. B) displays a positive rate of time preference. C) displays a zero rate of time preference. D) displays irrational behavior because the money will be more valuable later.
If a market produces a level of output below the competitive equilibrium, then
A) social welfare is not maximized. B) consumer surplus might still be maximized. C) the actual price will be below the equilibrium price. D) social welfare might still be enhanced if a price ceiling keeps price below the competitive price.