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Assumptions about Perfectly Competitive Markets

A monopoly fi...

Question

A monopoly firm is a price maker.

A

True

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B

False

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Solution

The correct option is A True
True.
Monopolist is a price maker because he is the single seller of a commodity with no close substitutes.

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Under perfect competition, the seller is a price taker. Under monopoly, he is the price maker. Explain.

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Q. Under perfect competition, the price is determined by the industry. At this price a firm can sell any quantity. The AR curve is perfectly elastic. Under monopoly, firms can sell more only at a lower price. So, AR is negatively sloped.
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Q. State with reason whether you agree or disagree with the following statements

A seller is price maker in monopoly.

For a monopoly firm, which of the following is equal to market price?

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Assumptions about Perfectly Competitive Markets

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