00:01
So the fundamental things that you need to remember here is the rule that firms follow in competition and in monopoly.
00:10
Competition means that price is equal to marginal cost.
00:13
Monopoly means that marginal revenue is equal to marginal cost, right? that's the difference.
00:18
So if we sketch these things, right, price, quantity, we have a marginal cost curve, we have a demand curve, we have a marginal revenue curve.
00:28
In competition you end up here, right? in monopoly, you end up here.
00:35
So in monopoly, you have a monopoly quantity and you have a high price.
00:40
In competition, you have a low price and a high quantity.
00:45
Remember, the whole idea of a monopolist is to reduce q and they want to reduce q to raise price, right? that's what a monopolist does...