GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Under monopoly and imperfect competition, MC is
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Less than the price
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More than the price
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Equal to the price
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Any of the above
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Explanation:
Detailed explanation-1: -This is because under perfect competition, AR = MR, while under monopoly AR > MR. Even when equilibrium in both cases is struck when MR = MC, under perfect competition the price is equal to MC at the equilibrium, while, P > MC at the monopoly firm’s equilibrium.
Detailed explanation-2: -Understanding Imperfect Competition Companies sell identical products with no product differentiation. The market consists of a large enough number of buyers and sellers so that no company can influence the price it charges and consumers alone set the price they are willing to pay each company.
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