The key difference between a competitive firm and a monopoly is the ability to influence the price. (IS THIS STATEMENT TRUE OR FALSE GIVE EXPLANATION)
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| TRUE Explanation Although there are several differences between a competitive firm and a monopoly, all stem from the fact that a monopoly has market power which makes it able to influence the price, while a competitive firm lacks the power to influence prices. Monopoly markets have only one seller and many buyers, which makes the seller a price maker because there are no close substitutes to the product sold by a monopoly. On the other hand, competitive market involves many buyers hence any single firm is considered a price taker. |
