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In perfect competition, price is equal to marginal revenue, while in monopoly, price is greater than marginal revenue.
Marginal Revenue
The increase in income from selling an additional unit of a good or service.
Perfect Competition
A market structure characterized by a large number of small firms, identical products, and freedom of entry and exit, leading to price-taking behavior.
Monopoly
A market structure characterized by a single seller, selling a unique product in the market. The seller faces no competition, as he is the sole seller of goods with no close substitute.
- Compare and contrast the economic outcomes of perfect competition and monopoly markets, particularly in terms of pricing and efficiency.
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Learning Objectives
- Compare and contrast the economic outcomes of perfect competition and monopoly markets, particularly in terms of pricing and efficiency.
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