question archive In a competitive market, a firm's supply curve dictates the amount it will supply
In a competitive market, a firm's supply curve dictates the amount it will supply
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In a competitive market, a firm's supply curve dictates the amount it will supply. How does a monopoly market compare?
a. The same statement applies.
b. The supply curve conceptually makes sense, but in practice is never used.
c. The supply curve will have limited predictive capacity.
d. The decision about how much to supply is impossible to separate from the demand curve the firm faces.
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The correct answer is d. The decision about how much to supply is impossible to separate from the demand curve the firm faces.
- This is because a monopolist does not have a supply curve - It is a price maker, not a price taker. All production decisions are thus purely based on the demand curve for the given good or service produced by the monopolist.
