Does a monopolist have a supply curve? Explain your answer. ...

[waynest]

Does a monopolist have a supply curve? Explain your answer.
 
  What will be an ideal response?

Question 2

Refer to the scenario above. If Alice values fairness, ________.
 
  A) she will not accept any offer made by Robert
  B) Robert should make the lowest possible offer to Alice
  C) she will accept the offer when Robert offers 250
  D) Robert should not play the game

[BUTTHOL369]

Answer to Question 1

A monopolist does not have a supply curve. Since monopolists are price makers, they do not vary their production based on market price. Instead, they set the market price. Like sellers in competitive markets, monopolists will produce at the point where their marginal revenue is equal to their marginal cost. But a monopolist's marginal revenue is dependent upon the negatively-sloped demand curve that it faces. Because a monopolist's production decision is based on demand, it cannot be depicted as an independent supply curve.

Answer to Question 2

C

[waynest]

Correct answers!

[BUTTHOL369]

Great! Please up vote