The following are four differences between monopoly and perfect competition. Whi

Question

The following are four differences between monopoly and perfect competition. Which of these is incorrect?
Choose one answer.
a. A monopolist has market power while a perfect competitor does not.
b. A monopoly will charge a higher price and produce a smaller quantity than a competitive market with the same demand and cost structure.
c. Unlike a perfectly competitive firm, a monopoly can make positive economic profits in the long run.
d. Monopoly profits can continue to exist in the long run, because the monopoly produces more and charges a higher price than a comparable perfectly competitive industry.

Explanation / Answer

1. d. monopoly profits can continue to exist in the long run, because the monopoly produces more and charges a higher price than a comparable perfectly competitive industry.

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