How market power shifts the relationship between price and marginal revenue
In short: In imperfect competition, firms gain control over their pricing. This video explores how that ability to set prices fundamentally alters the shape of the marginal revenue curve compared to perfectly competitive markets.
The video examines how market structure influences economic outcomes. In perfectly competitive markets, a firm's demand curve is horizontal, but in imperfect competition, firms possess enough control to charge different prices, which changes the behavior of the marginal revenue curve.
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Sources
- Summary by Intellect · source: Types of competition and marginal revenue | APⓇ Microeconomics | Khan Academy
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