Which of the following statements is true of a monopoly firm?
A) A monopoly firm is a price taker and has no supply curve.
B) A monopoly firm is a price maker and has no supply curve
C) A monopoly firm is a price maker and has a downward-sloping supply curve.
D) A monopoly firm is a price maker and has an upward-sloping supply curve.

Question

Quizplus · Accepted Answer

A monopoly firm is a price maker, meaning it has the ability to set the price of its product. Unlike a perfectly competitive firm, a monopoly firm does not have a supply curve as its output decision is not determined by the market price. Instead, the monopoly firm sets its output level to maximize profits, based on its marginal revenue and marginal cost.

Which of the Following Statements Is True of a Monopoly