ASSESS Chapter 14 Homework-Van Bui Both monopolies and monopolistically competit

Question

ASSESS Chapter 14 Homework-Van Bui Both monopolies and monopolistically competitive firms set marginal revenue equal to marginal cost to maximize profit. Given the same cost curves, would you expect prices to be higher in a monopoly or a monopolistically competitive market? O A. Monopoly, because it is a price taker. ( B. Monopoly, because its demand is more inelastic. O c. Monopoly, because consumers are more sensitive to price. D. Monopolistically competitive market, because demand is greater.

Explanation / Answer

Answer

Option B

the monopoly has no close substitutes for its product so the demand is inelastic and it can charge a higher price but do not loose on consumers.

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