In the case of a monopoly, the supply curve:
A)is given by the marginal cost curve above average variable cost.
B)is given by the marginal revenue curve.
C)is given by the demand curve.
D)does not exist.

Question

Quizplus · Accepted Answer

In the case of a monopoly, the concept of a supply curve does not apply in the traditional sense because the monopolist sets the price based on demand, not on a supply curve. The monopolist's production decisions are based on marginal costs and marginal revenues, not on a supply curve intersecting a demand curve as in perfect competition.

In the Case of a Monopoly, the Supply Curve