question archive The following are the possible characteristics related to different market structures, except a
The following are the possible characteristics related to different market structures, except a
Subject:MarketingPrice:2.88 Bought3
The following are the possible characteristics related to different market structures, except
a. monopoly always implies the existence of positive economic profits.
b. the key characteristic of monopolistic competition is product differentiation.
c. under perfect competition firms will compete only in price since the product is standard.
d. collusion is a profitable but unstable strategy under oligopoly.
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The answer is a).
A monopoly will produce at a level where marginal revenue is equal to marginal cost, where price is higher than the marginal cost. But this does not guarantee a positive profit. If production involves a fixed cost that is sufficiently high, the maximized profit for a monopoly could be negative in the short run.
