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Question
Microeconomics
Posted 8 months ago
Which of the following lists shows the types of market ordered from highest to lowest market quantity?
Choose 1 answer:
A oligopoly, perfect competition, monopoly
(B) monopoly, perfect competition, oligopoly
(c) monopoly, oligopoly, perfect competition
D perfect competition, monopoly, oligopoly
(E) perfect competition, oligopoly, monopoly
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Answer from Sia
Posted 8 months ago
Solution
a
Market Quantity: In perfect competition, firms produce at the point where marginal cost (MC) equals marginal revenue (MR), leading to the highest market quantity
b
Monopoly: A monopoly restricts output to maximize profit, resulting in a lower market quantity compared to perfect competition
c
Oligopoly: An oligopoly has fewer firms than perfect competition but more than a monopoly, leading to a market quantity that is typically between the two
Answer
D perfect competition, oligopoly, monopoly
Key Concept
Market Quantity in Different Market Structures
Explanation
Perfect competition results in the highest market quantity because firms produce where MC equals MR. Monopolies restrict output to maximize profit, leading to the lowest market quantity. Oligopolies fall in between these two extremes.
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