Amanda inherited the only local cable TV/Internet company in town after her father passed away. The company has a local monopoly on the delivery of high-speed Internet service. The company is completely unregulated by the government and is therefore free to operate as it wishes. Assume that Amanda understands the true power of her new monopoly. Which of the following statements is (are) correct? (i)
She will be able to set the price of high-speed Internet service at whatever level she wishes.
(ii)
The customers will be forced to purchase high-speed Internet service at whatever price she wants to set.
(iii)
She will be able to achieve any profit level that she desires.
A)(i) only
B)(ii) only
C)(i) and (iii) only
D)(i), (ii), and (iii)

Question

Quizplus · Accepted Answer

Amanda can set the price at whatever level she wishes due to the monopoly, but customers are not forced to purchase if the price is too high, and she cannot achieve any profit level she desires as demand may decrease with higher prices.

Amanda Inherited the Only Local Cable TV/Internet Company in Town