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

Question

Quizplus · Accepted Answer

In a monopoly, the optimal output level is where marginal revenue equals marginal cost. Monopolies do not have a supply curve in the traditional sense because their output decision is based on the demand curve they face, not on a supply curve.

Bob Owns a Trout Farm with Monopoly Power in North