Does a monopolist take market price as given? Why or why not?No, because barriers to entry exist, a monopolist does not take the market price as given.No, a monopolist takes into account that its output decision can affect price, and its marginal revenue is not its price.Yes, a monopolist takes the market price as given because the monopolist faces potential competition from other firms, so the price charged must be competitive.Yes, a monopolist’s marginal revenue is the given market price.

A market is a place where producers of a commodity or service as well as the buyers of the…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Does a monopolist take market price as given? Why or why not?

No, because barriers to entry exist, a monopolist does not take the market price as given.
No, a monopolist takes into account that its output decision can affect price, and its marginal revenue is not its price.
Yes, a monopolist takes the market price as given because the monopolist faces potential competition from other firms, so the price charged must be competitive.
Yes, a monopolist’s marginal revenue is the given market price.

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