SUPPLY CURVE OF

MONOPOLIST

MONOPOLY

A Monopoly is a form of market structure in which a single seller of a firm has control over the entire market supply .This sole seller in the market is called ‘‘MONOPOLIST’’.

When a product is produced and sold under conditions of monopoly the monopolist gains at the expense of consumers, who have to pay a price higher than the marginal cost of production.

SUPPLY CURVE

A supply curve is a graphic representation of the relationship between product price and quantity of the product that a seller is willing and able to supply.

In the words of Baumol ‘‘The supply curve is strictly speaking a concept which is usually relevant only for the case of perfect competition. The reason for this lies in its definition –the supply curve is designed to answer question of the firm, how much will firm ‘A’ supply if it encounters a price which is fixed at P dollars'. But such a question is most relevant to the behavior of firms that actually deal with prices over whose determination they exercise no influence’’

Same quantity supplied at two different prices

Two different quantities supplied at same price

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