Under conditions of monopoly and perfect competition, a firm: ?

Question

is a price seeker.

is a price taker.

will quit producing in the short run if price is less than ATC.

will produce at that output level where the MR equals MC.

always earns an economic profit.

Answer 1

This is an oxymoron. How can there be monopoly and perfect competition?

Answer 2

Monopoly is a Price Seeker

Perfect Competition is a Price Taker

Perfect Competition: will quit producing in the short run if price is less than ATC

Monopoly will produce at that output level where the MC equals MC

the last one is a tricky only because no market structure ALWAYS earns economic profit.

Monopoly earn economic profit in the long run. In the short run they can make loss or profit

Perfect competition can make zero profit in long run. In the short run they can make profit or loss as well.

Answer 3

Will produce at that output level where the MR equals MC. At this point, the firm is producing the quantity that will maximise profit.

To get a good grasp on this, I would recommend this video: http://www.youtube.com/watch?v=a4YuY79IV...

Answer 4

will produce at that output level where the MR equals MC.