alleryStart learning →A monopolist in the real world often lacks enough information to analyse its entire:
ANumber of units it sold
BTotal revenue and cost curves
CMarginal revenue at one point
DPrice charged last quarter
Answer & Solution
Correct answer: B. Total revenue and cost curves
1. Textbook diagrams assume more knowledge than a real firm has.
2. In the real world, a monopolist often does not have enough information to analyze its entire total revenues or total costs curves.
3. That is why the analysis is carried out in marginal terms instead.
4. A firm can usually judge the effect of one more unit even when the whole curve is unknown.
5. Its own past price and sales figures are exactly the data it does have.
_Source: OpenStax Principles of Microeconomics for AP(R) Courses 2e (CC BY 4.0), Ch 9 'Monopoly', sections 9.1-9.2_
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