Question

Bob owns a trout farm with monopoly power in north carolina. bob's optimal output occurs where marginal revenue ________. because of monopoly power, bob's supply curve ________. select one:
a. exceeds marginal cost; is perfectly inelastic
b. equals marginal cost; does not exist
c. equals marginal cost; is upward sloping
d. exceeds marginal cost; does not exist

Answer 1

The right answer is C. marginal revenue equals marginal cost; is upward-sloping. Marginal revenue is the amount that revenue increases if someone sells one more unit of their product. When there's competition, every unit has the same price, but when there's a monopoly, you have to make cheaper every other unit to sell one more