Which statement correctly describes the relationship between price and marginal cost in perfectly competitive versus monopolistic markets?

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In perfectly competitive markets, price is equal to marginal cost, whereas in monopolistic markets, price is higher than marginal cost.In perfectly competitive markets, price matches marginal cost, and in monopolistic markets, price also matches marginal cost.In perfectly competitive markets, price is greater than marginal cost, and in monopolistic markets, price is also greater than marginal cost.In perfectly competitive markets, price exceeds marginal cost, but in monopolistic markets, price equals marginal cost.None of the above statements are accurate.

Explanation

In perfectly competitive markets, firms produce where price equals marginal cost, ensuring efficient allocation of resources. However, monopolistic markets restrict output to raise prices above marginal cost, resulting in allocative inefficiency.