... monopolist will never produce on the inelastic part of a demand curve - by increasing prices they will increase total revenue. Monopolist raises prices and cuts back on supply. Graphs p 148 Begg (In the long run will wish production to remain at lowest average cost, so will reduce production by closing individual plants and operating the remainder at most efficient level, lowest LAC). The absence of a supply curve under monopoly (no unique supply curve referring to price): Knowing the price, we cannot uniquely infer the quantity supplied unless we also know the demand and MR. Because the monopolist knows output affects both marginal cost and marginal revenue, the two must be considered simultaneously (Graph p151, Begg) Natural monopolist: enjoys huge economies of scale, with decreasing LAC over the entire range of outputs the market will demand. Social costs and benefits Monopolists charge above marginal cost, therefore above marginal utility to the consumer. ...

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