The supply curve for a monopolist, in the short run, is defined in the same way as that for a competitive firm: it is the portion of the marginal cost curve above average variable cost.

Question

Quizplus · Accepted Answer

A monopolist does not have a supply curve in the traditional sense because it does not take the market price as given and then decide how much to produce. Instead, a monopolist sets its production level based on where marginal cost equals marginal revenue, without reference to a supply curve that is defined by the portion of the marginal cost curve above average variable cost.

The Supply Curve for a Monopolist, in the Short Run