Figure 15-22
The diagram depicts the market situation for a monopoly pastry shop called Bearclaws.
-Refer to Figure 15-22. If we want to plot the supply curve for Bearclaws, what is the lowest output that it would produce?

Question

​Figure 15-22
The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. 
-Refer to Figure 15-22. If we want to plot the supply curve for Bearclaws, what is the lowest output that it would produce?

Quizplus · Accepted Answer

A monopoly does not have a supply curve, as it has the power to set the quantity it wants to produce and the corresponding price it wants to charge. The output level is determined based on the profit-maximizing point, where marginal revenue equals marginal cost.

​Figure 15-22 The Diagram Depicts the Market Situation for a Monopoly Pastry

Figure 15-22 The Diagram Depicts the Market Situation for a Monopoly Pastry