Why is it that for sellers in a purely competitive market, the price received for each item equals the marginal revenue, while for sellers in imperfectly competitive markets the price received for their product is greater than the marginal revenue?
This is due to the elasticity of the demand curve.
In a purely competitive market, the demand curve faced by the firm is perfectly elastic, i.e., a horizontal line. The market price does ...
Briefly examine a competitive market.