A monopoly firm is a price
A)taker and has no supply curve.
B)maker and has no supply curve
C)taker and has an upward-sloping supply curve.
D)maker and has an upward-sloping supply curve.

Question

Quizplus · Accepted Answer

A monopoly firm has the power to set its own price because it has no close substitutes and faces no competition. Therefore, it is a price maker. However, it still has a supply curve even though it is not a perfectly elastic one like a competitive firm. The supply curve is upward-sloping because as the price increases, the firm is willing to produce more to maximize profits.

A Monopoly Firm Is a Price