![]() Notice the break in the horizontal axis indicating that the quantity produced by a single firm is a trivially small fraction of the whole. The marginal cost curve, MC, for a single firm is illustrated. ![]() Those, in turn, consist of the portions of marginal cost curves that lie above the average variable cost curves. The market supply curve is found simply by summing the supply curves of individual firms. In Panel (a), the equilibrium price for a perfectly competitive firm is determined by the intersection of the demand and supply curves. Figure 10.3 “Perfect Competition Versus Monopoly” compares the demand situations faced by a monopoly and a perfectly competitive firm. Because a monopoly firm has its market all to itself, it faces the market demand curve.
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