What is the difference between a monopoly's marginal revenue curve and a perfect competitor's marginal revenue curve?
What will be an ideal response?
A monopoly's marginal revenue curve lies entirely below its market demand curve and is downward sloping, but a perfect competitor's marginal revenue curve is the same as its demand curve which is horizontal at the prevailing market price.
You might also like to view...
If the final expressions in a present value equation used to calculate the price of a bond you are considering buying are "[$50 / (1 + .08)3] + [$500 / (1 + .08)3]," which of the following is correct?
A) The face value is $500, the coupon is $50, and the coupon will mature in 3 years. B) The face value is $50, the interest rate you need is 8 percent, and the coupon will mature in 3 years. C) The coupon is $50, the interest rate you need is 1.08 percent, and the coupon will mature in 3 years. D) The face value is $500, the interest rate you need is 3 percent, and the coupon will mature in 8 years.
In this situation, the deadweight loss from monopoly is:
a. 0.40. b. 0.16. c. 0.12. d. 0.08.