The supply curve for a monopoly is given by
A)the firm's marginal cost curve above the average variable cost curve.
B)the one point on the demand curve that corresponds to the quantity for which price is equal to marginal cost.
C)the entire demand curve above the point where price is equal to average cost.
D)the monopolist does not have a well-defined supply curve.

Question

Quizplus · Accepted Answer

A monopoly does not have a well-defined supply curve because a monopoly has the ability to choose both the quantity produced and the price charged. The profit-maximizing output and price combination will depend not only on the monopolist's marginal cost, but also on the demand curve it faces.

The Supply Curve for a Monopoly Is Given by