Marginal cost curve and supply curve Watch
Hi guys, can marginal curve can be considered as the supply curve for an individual company in all types of market structure? Or is it only true in perfectly competitive market?
In other forms of market structure, a firm's decision to produce is not smooth and depends on the demand side. If you're a monopolist, you're not going to ask "if good x is going for y, how many should I supply?" because you control the price that's set. Hence marginal costs (and costs in general) then in those situations form only part of a firm's decision to price it's offerings at, it becomes a question of the maximum amount they can extract from the consumers.