In Monopoly, say for example Electricity supply firm
Suppose the Market demand = 10kWatts
Price
If there is only 1 firm in the market = 10$
If there is only 2 firms in the market = 20$
If there is only 3 firms in the market = 30$
and so on
Why does the cost increase/multiply when the number of firms in the monopoly increase?
I know the LRAC curve is downward sloping curve and the demand curve is downward sloping...
I dont get the concept..!!!!!!!!! |