Perfect competition is the most competitive of market structures, and monopoly is the least competitive. Because firms in perfect competition can only hope to break even in the long run, most of them probably would rather be monopolists, who can earn profits in the long run. As we shall see, the long-run market equilibrium for the monopolist is quite different from the outcome in the perfectly competitive market.
After completing this chapter, the student should be able to:
1. List and explain the key assumptions of monopoly.
2. Understand the relationship between the price of a unit sold, the marginal revenue received from its sale, and the price elasticity of demand along the demand curve.
3. Use the rule ...