Why is there no Supply Curve under Monopoly? | Markets

Get the answer of: Why is there no Supply Curve under Monopoly?

The supply curve is relevant for a price-taker. There is no so supply curve of a price-maker. This is so because when a firm faces a downward sloping demand curve, there is no unique relation between the price that it charges and the quantity that it sells. In part (i) of Fig. 6, two demand curves D₀ and D₁ both have marginal revenue curves that interest the same marginal cost curve at the same level of output q₀. But because the demand curves are different, q₀ is sold at p₀ when the demand curve is elastic (D₀) and at pi when the demand curve is inelastic (D₁).

In part (ii), the marginal revenue curves MR₂ and MR₃ intersect the marginal cost curve at two different levels of output, q₂ and q₃. Because the two demand curves have different shapes and slopes, the two levels of output are sold at the same price, p₂.

Thus it is difficult to find out one-to-one relation between a particular price and quantity offered for sale at that price. So we cannot locate any point on the supply curve. Hence the supply curve cannot be drawn. In other words, the MC curve of the monopolist is not its supply curve.