Explain the concept of short run equilibrium of a monopoly assuming zero cost
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The concept of short run equilibrium of a monopoly assuming zero cost is explained as below:
• A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity.
• The verb monopolize refers to the process by which a company gains the ability to raise prices or decrease competitors.
• With constant value ‘zero’ of marginal cost, the value of average cost is also constant and is equal to zero.
• With zero cost of production, the monopolist has only to decide at which output, the total revenue will be maximum.
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