Monopoly vs Perfect Competition


Monopoly

Perfect Competition

A Firm

· Is the sole producer

· Has a downward-sloping demand curve

· Is a price maker

· Reduces price to increase sales

· P > MR = MC

A firm

· Is one of many producers

· Has a horizontal demand curve

· Is a price taker

· Sells as much or as little at same price

· P = MR = MC


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