A perfect competitive market and pure monopoly market both have to follow the "law of demand".
Both maximize profit where MR = MC.
higher prices and fewer goods
perfectly competitive industry become a monopoly, what changes
Monopoly means that there are no competitor for your product or servises
A perfectly competitive firm would set its prices at a perfectly competitive price.
perfectly elastic demand function.
Explain how monopoly causes an inefficient allocation of resources when the competitive firm does not even when both seek to maximize profit
perfectly competitive industry become a monopoly, what changes
perfectly competitive industry become a monopoly, what changes
Monopoly means that there are no competitor for your product or servises
A perfectly competitive firm would set its prices at a perfectly competitive price.
yes
perfectly elastic demand function.
Explain how monopoly causes an inefficient allocation of resources when the competitive firm does not even when both seek to maximize profit
is earning a profit
monopoly
A monopoly produces at a point where marginal revenue equals marginal cost, they don't charge this price, but charge a higher price that corresponds with the demand they face. Therefore they produce less and charge more than a competitive firm that equates the price to marginal cost.
In Monopoly, there is no market power as the monopoly firm is the only supplier and holds pricing power. However in a perfect competitive market, prices are set by interaction of supply and demand. This is why monopoly markets are undesirable relative to perfect competitive market.
Minimizing cost