00:01
So here we have four options, right, to discuss about make sure we know what a monopolist is, right? because the demand curve for monopolist is downward sloping, a monopolist is a price taker.
00:16
This is exactly wrong, right? a monopolist means that you're the only person in the market.
00:22
In a competitive market, you have to go to this equilibrium, right? you have to set cost equal to demand to rule out profits.
00:32
And if there are profits, people enter the industry seeking those profits and drive those profits down to zero.
00:38
This is wrong.
00:40
The monopolist, because they're the only seller in the industry, can set whatever profit they want because they're not disciplined by competition.
00:46
They can set the price to be this by producing only this amount.
00:50
And they can enforce that price because nobody can enter the market.
00:53
And as soon as they set this price, they start making those lovely monopolist profits, right? the fact that the demand curve is downward sloping has nothing to do with it, the monopolist is not a price taker by definition.
01:06
Right.
01:06
B, the monopolist has many possible price outputs, many pq choices.
01:16
This is correct.
01:17
Because the monopolist is the only person in the market, the monopolist gets to choose how much to produce.
01:23
I just drew the monopolist drawing here, but if the monopolist wanted to produce here, or if the monopolist wanted to produce here, they would be free to do so, right? because the demand curve is downward sloping, every quantity that the monopolist might choose is associated with different prices based on the demand.
01:42
If the monopolist chooses to produce a lot, it won't get a high price.
01:45
If it chooses to choose to produce only a little, it will get a high price, right? so since the monopolist can pick whatever quantity it wants, each quantity is associated with a price, and so it has many combinations of p and q to choose from.
02:00
This one is correct...