Asked by Katelyn Nartiff on Jun 29, 2024
Verified
Pure monopolists
A) maximize MR.
B) are price takers.
C) operate where P > MC.
D) face demand curves that are perfectly inelastic.
Pure Monopolists
Entities that entirely dominate an industry or sector, with no competition due to unique products, control of resources, or significant barriers to entry.
Price Takers
Entities in a market that accept the prevailing prices for its goods or services, having no power to influence the market price.
Demand Curves
A graphical representation of the relationship between the price of a good and the quantity demanded by consumers, typically downward sloping, indicating that demand decreases as price increases.
- Apply the concept of marginal costs and marginal revenue to the decision-making process of profit-maximizing firms.
- Explain the implications of monopolistic supply curves and their difference from competitive supply curves.
Verified Answer
EC
Esmeralda ColonJul 01, 2024
Final Answer :
C
Explanation :
Pure monopolists operate where the price (P) is greater than marginal cost (MC) because they have the power to set prices above marginal costs due to the lack of competition.
Learning Objectives
- Apply the concept of marginal costs and marginal revenue to the decision-making process of profit-maximizing firms.
- Explain the implications of monopolistic supply curves and their difference from competitive supply curves.