1.

Compare the price and output of a firm under perfect competition and monopolistic competition.

Answer»

A firm under perfect competition is a price taker and have a horizontal demand, but a firm under monopolistic competition is a price maker and faces a demand curve that in downward sloping and elastic. Under perfect competition MR = AR. So the firm produces more output and charge less compared to monopolistic competition. 

Under monopolistic MR < AR.



Discussion

No Comment Found