calvinnz well done.
i wanna give some supplement to the first one.
under the circumstance of perfect competition market, one producer determine his price addcording to the production at which point the marginal return equals to the marginal cost(better saying choose his marginal cost which is equals to the existing price).
this principle applies to a monopoly firm. but the difference is that the demand curve is the very MR curve in a competition market because of the constant price whereas, when a single producer holds the market he faces a demand curve with slope and therefor the demand curve is always above its marginal return curve(as regular).
suppose the cost is constant when the production is provided no matter whether it were supplied by a monopoly firm or a competition one, and that the production is given.
for a monopoly firm, at the point when the MR=MC, the quantity is determined, but the equilibrium price should be found on the demand curve, which is above the MR curve.
Therefore, when the MR is equal to the competition price, the monopoly price is to be higher than it.
[此贴子已经被作者于2006-4-16 18:35:40编辑过]