Monopolist – Essaylink

 

Analyse and Justify on monopolist

(b)Evaluate the validity of the following statements regarding monopoly. Analyse and justify your answers.(i) A monopolist with a linear demand curve will never operate at the portion of the demand curve that is inelastic. It will always operate at the midpoint of the demand curve. (10Marks)

(ii) If there are substantial economies of scale to exploit, a monopolist will be more productive efficient than many competitive firms in the market, and the monopolist will also be allocative efficient. (10 marks)

 

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