For a purely competitive firm, P=MR=D

• The condition P=MR=D does not hold a monopolist. It only holds for a purely competitive firm.

In a purely competitive market, the firm's price is equal to the marginal revenue(MR) because the price of a product is constant for every unit sold in the market. As a result, the marginal revenue is equal to price and also equal to demand.

On the contrary, in the monopoly market, price is not equal to the marginal revenue (MR) as the price is not constant. In this market, the monopolist has to reduce the price to sell the more units of the commodity in the market. This negative relationship between price and quantity leads to a price (Average revenue), which is more than MR.