If a monopoly wants to sell a greater quantity of output, it must
A) raise its marginal cost.
B) raise its price.
C) lower its price.
D) tell consumers to buy more because it's a monopolist.
E) change its fixed costs.

Question

Quizplus · Accepted Answer

Monopolies have the ability to set their own prices because they are the only supplier of a particular product. However, if they want to sell more output, they must lower their price in order to incentivize consumers to purchase more. This is because the demand curve for a monopoly slopes downward, meaning that as the price increases, the quantity demanded decreases. Therefore, if the monopoly wants to sell more output, it must lower its price to increase the quantity demanded.

If a Monopoly Wants to Sell a Greater Quantity of Output