Why is there no supply curve in a monopolistic market?

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1005719

2026-03-23 05:51

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Because there is, and the common belief there isn't one is a fallacy. The Law of Supply (from where we get the supply curve) says supply increases as prices increase. A monopoly sees the same effect--if the price goes up, supposedly the supply will go up because the producer will be encouraged to make more of the item, which will make him more money. The Law of Demand says demand increases as prices decrease. Where the two lines cross is the "equilibrium price." Equilibrium is good--you're selling all you make, and no one is unhappy because they can't get what you sell. The reason there are supply and demand curves in a monopoly is there is almost no such thing as an irreplaceable item, with the exception of Rolls-Royces, fancy wine and other limited-production luxury items. You can always substitute something for the monopoly good if the monopoly supplier gets stupid about their pricing. There's only one airline? Cars still work. Only one brand of toothpaste? Use baking soda.

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