Final answer:
Marginal revenue for a monopolist is not equal to price, as it is for a pure competitor, because a monopolist must lower the price to sell more units, affecting the MR. A monopolist determines MR and MC based on changes in output to find the profit-maximizing quantity, which differs from a monopolistic competitor that faces more elastic demand and direct competition.
Step-by-step explanation:
The behavior of marginal revenue (MR) for a monopolist is different compared to that of a pure competitor due to the fact that a monopolist's MR does not remain constant with each additional unit sold. In a purely competitive market, MR is equal to the price (P), because the firm is a price taker and selling more units does not affect the market price. However, for a monopolist, MR is not equal to the price. This is because a monopolist is a price maker and can influence the market price; as a monopolist sells more units, it must lower the price to sell additional units, which causes MR to be lower than the price.
A monopolist uses its experience with changes in output to determine how these changes affect MR and marginal costs (MC). The profit-maximizing condition for a monopolist, as well as for a monopolistic competitor, is to produce the quantity of output where MR equals MC. Nevertheless, because a monopolistic competitor faces direct competition and thus has a more elastic demand curve, it behaves differently in its pricing and output decisions compared to a monopolist.