The Above Figure Shows the Market Demand Curve for Long-Distance

Multiple Choice

The above figure shows the market demand curve for long-distance land-based telephone calls. Suppose the marginal cost of a long-distance telephone call is 2 cents per minute for a call no matter how many minutes of calls are made and there are three firms in the industry. If the firms in the industry operate as perfect competitors, the price of a call is ________ per minute and if the firms in the industry operate as a monopoly, the price of a call is ________ per minute.

A) 2 cents; more than 3 cents and less than 4 cents
B) either equal to or more than 4 cents; 2 cents
C) 1 cent; 2 cents
D) more than 3 cents and less than 4 cents; more than 3 cents and less than 4 cents
E) 2 cents; either equal to or more than 4 cents