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please define or identfie:
monopolist with no cost production.
Solution
The monopoly that has zero additional cost of production is a monopoly without cost. The
marginal and average cost of production is zero. The monopolist sets equilibrium output for
which maginal revenue is zero. Then the monopolist sets the price from the demand curve for
corresponding quantity.
The example of monopoly with no cost is conputer software. The invention and designing of the
software has initial cost but the cost of making another copy of the software is essentially zero.
That is the mC and AC of production of the software is zero.

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please define or identfiemonopolist with no cost production.S.pdf

  • 1. please define or identfie: monopolist with no cost production. Solution The monopoly that has zero additional cost of production is a monopoly without cost. The marginal and average cost of production is zero. The monopolist sets equilibrium output for which maginal revenue is zero. Then the monopolist sets the price from the demand curve for corresponding quantity. The example of monopoly with no cost is conputer software. The invention and designing of the software has initial cost but the cost of making another copy of the software is essentially zero. That is the mC and AC of production of the software is zero.