Why are price and marginal revenue identical for the firm in perfect competition?
Answer to relevant QuestionsEconomists refer to perfectly competitive firms as price-takers and to monopolies as price-makers. Why? In perfect competition, imitators dampen the innovating spirit of innovators. Explain. Suppose the firm is a monopoly and its price schedule is: How many brooms would the firm produce? Would the firm be making an economic profit? Is the U.S. economy becoming more oligopolistic? What evidence supports your answer? Tit-for-tat--meaning if you raise your price, I'll match you by raising mine, and if you lower your price, I'll match you by lowering mine--seems to be a win/win strategy for both firms competing in a balanced oligopoly ...
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