In perfect competition P = MR, but in monopoly P > MR. Why? Substantiate this statement with an example
In perfect competition the demand curve is horizontal. The demand curve for the monopoly firm is downward sloping. This shows that in order to sell more, the monopoly firm has to reduce the price. Therefore marginal revenue would be less than the price.
For example, if a monopoly firm sells one unit of commodity X at the price of $10 the total revenue and marginal revenue would be equal to price which is $10, but if the firm decides to sell more units of commodity X, then it has to reduce the price to, may be, $9 which would give a marginal revenue of $8 which is less than the current price.
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