In 1999, a judge declared that Microsoft was a monopolist.Assuming that it is maximizing its profits at its current level of output, we may conclude that if Microsoft were to increase its price its total revenue would:

Question

Quizplus · Accepted Answer

When a firm has monopoly power, it has the ability to influence the market price. If Microsoft were to increase its price, it would likely experience a decrease in the quantity demanded, leading to a decrease in total revenue. Therefore, total revenue would fall if Microsoft were to increase its price while holding output constant.

In 1999, a Judge Declared That Microsoft Was a Monopolist