Bob owns a trout farm with monopoly power in North Carolina. Bob's optimal output occurs where marginal revenue _____. Because of monopoly power, Bob's supply curve _____.
A) equals marginal cost; does not exist
B) exceeds marginal cost; does not exist
C) equals marginal cost; is upward-sloping
D) exceeds marginal cost; is perfectly inelastic

Question

Quizplus · Accepted Answer

In a monopoly, the optimal output occurs where marginal revenue equals marginal cost. A monopolist does not have a supply curve because it is a price maker, not a price taker.

Bob Owns a Trout Farm with Monopoly Power in North