Question

2- Do you think the monopolist acts as profit maximizing ( price , cost ) ?...

2- Do you think the monopolist acts as profit maximizing ( price , cost ) ? illustrate your answer with graph

Homework Answers

Answer #1
  1. The main aim of the monopolist is to maximize the profit and the big advantages of this market are to maximize the profit by selling more good at the discriminating price.
    In the Monopoly market, there is a chance of earning more than normal profit because of less competition and here the profit is existing when average cost lies below the average revenue curve and here the gap between OP and OP 1 is supernormal profit.
    It can be represented in the following diagram.
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