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Price Determination in Perfect Competition by Gaurab Neupane is a document available to read on EtoBox.
Under perfect competition, price and output are determined by the equilibrium of market supply and demand. Individual firms are price takers and will produce where marginal revenue equals marginal cost. In the long run, firms will earn only normal profits as excess profits attract new competition. Under monopoly, a single firm determines price and output where marginal revenue equals marginal cost. The firm can earn excess profits in both the short and long run due to lack of competition.
- Author
- Gaurab Neupane
- Language
- EN