MR P determined by demand curve. A Simple Pricing Rule for Monopoly and Monopolistic Competition Where to set price when cost and demand functions not known.
Markups vary with skills tied up in products Markups vary with uniqueness of markets.
Crafters talk among themselves to get information about optimal markups. MR of each firm depends on actions of rivals. Three implications of this pricing rule. The larger the number of firms, the lower the markup. The higher the marginal cost, the higher the price. causes difficulties for firms with higher costs.