From http://www.rane.com/par-d.html:
A microphone design where a wire coil (the voice coil) is attached to a small diaphragm such that sound pressure causes the coil to move in a magnetic field, thus creating an electrical voltage proportional to the sound pressure. Works in almost the exact opposite of a dynamic loudspeaker where an electrical voltage is applied to the voice coil attached to a large cone (diaphragm) causing it to move in a magnetic field, thus creating a change in the immediate sound pressure. In fact, under the right circumstances, both elements will operate as the other, i.e., a dynamic loudspeaker will act as a microphone and a dynamic microphone will act as a loudspeaker -- although not too loud. See electromagnetic induction.

See also condenser.

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