Final answer:
The key difference between a competitive firm and a monopoly firm is the ability to select market prices, where competitive firms are price takers and monopolies can influence prices due to lack of direct competition.
Step-by-step explanation:
The key difference between a competitive firm and a monopoly firm is the ability to select prices. A competitive firm, operating in a perfect competition market structure, is a price taker. It must accept the market price and cannot influence it with its own output levels. In contrast, a monopoly has the power to choose its market price because it is the sole provider of a product or service, and therefore, does not face direct competition. Monopolies are protected by high barriers to entry, which could be due to laws, technological advantages, or unique control over a scarce resource. In market structures like oligopolistic markets, firms may choose output, pricing, and other decisions strategically, but they still face competition from a few other firms.