Which of the following is (are) true of monopoly? (i) A monopoly has the ability to set its price

Marketing Jan 11, 2021

Which of the following is (are) true of monopoly?

(i) A monopoly has the ability to set its price.

(ii) A monopolist marginal revenue will always increase when it lowers the price of its product.

(iii) A monopoly can never experience an economic loss.

a. (i) only

b. (ii) only

c. (i) and (ii) only

d. (ii) and (iii) only

Expert Solution

The correct option is:

a. (i) only

Since the monopolist is the only seller in the market, the entire market is dependent on its supply. The monopolist firm enjoys the complete control of the market and hence has the power to set it's own prices.

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