Why exactly are prices different in a competitive market

Reference no: EM133659697

Problem: If profit maximization were the only objective, the monopolist would price at $29 per 1000 units (or, $58 per 2000 units of the drug), serve 55,650 patients and earn profits of $350,595,000. Compare this to the results from the competitive outcome, where roughly 111,000 patients were served at a price of $8 each (or, $16 per 2000 units), for zero profits. Compare the two situations you've just analyzed. Why exactly are prices different in a competitive market than for a monopolist?

Reference no: EM133659697

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