Oh what a tangled web we weave, When first we practice to deceive
On the left is a diagram showing monopoly. The price charged is P3 - but why there? Answer: that's the output where MC = MR. But how does hte monopolist KNOW the MC? It's producing 000s of products - how will it KNOW the MC? And if it doesn't know the MC then....
Also... if the price is P3, where is supply? There does not seem to be a supply curve - so why is P3 equilibium?