If the factor supply curve facing a monopolist is the market supply curve, and if the market supply curve is an upward sloping straight line, the marginal expenditure curve
A) lies below the market supply curve.
B) lies above the market supply curve.
C) is the market supply curve.
D) crosses the market supply curve at the market wage rate.
E) either A or B is possible.

Question

Quizplus · Accepted Answer

The marginal expenditure curve lies above the market supply curve for a monopolist because the monopolist must pay a higher price to attract additional units of the factor, increasing the marginal cost of each additional unit.

If the Factor Supply Curve Facing a Monopolist Is the Market