A perfect competitive market and pure monopoly market both have to follow the "law of demand".
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.
I agree with the statement. A perfectly competitive firm operates where price equals marginal cost, leading to an efficient allocation of resources and typically resulting in a higher output at a lower price than a monopoly. In contrast, a single-price monopoly maximizes profit by producing less output and charging a higher price, leading to decreased consumer surplus and potential market inefficiencies. Thus, perfect competition generally results in greater output and lower prices compared to monopoly scenarios.
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.
I agree with the statement. A perfectly competitive firm operates where price equals marginal cost, leading to an efficient allocation of resources and typically resulting in a higher output at a lower price than a monopoly. In contrast, a single-price monopoly maximizes profit by producing less output and charging a higher price, leading to decreased consumer surplus and potential market inefficiencies. Thus, perfect competition generally results in greater output and lower prices compared to monopoly scenarios.
is earning a profit
Explain how monopoly causes an inefficient allocation of resources when the competitive firm does not even when both seek to maximize 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.