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 MC.
C)the one point on the demand curve that corresponds to the quantity for which MR equals MC.
D)the entire demand curve above the point where price is equal to average cost.

Question

Quizplus · Accepted Answer

The supply curve for a monopoly is best represented by the point on the demand curve where marginal revenue (MR) equals marginal cost (MC). This is because monopolies do not have a fixed supply curve like perfectly competitive firms; they can adjust their output to maximize profits. Therefore, the point where MR equals MC is the profit-maximizing quantity of output for the monopoly, and corresponds to the quantity at which it is willing and able to supply the market.

The Supply Curve for a Monopoly Is Given By