Because a monopolist is the sole producer in its market, it can necessarily alter the price of its good (i)
Without affecting the quantity sold.(ii)
Without affecting its average total cost.
(iii)
By adjusting the quantity it supplies to the market.
A)(ii) only
B)(iii) only
C)(i) and (ii) only
D)(ii) and (iii) only

Question

Quizplus · Accepted Answer

A monopolist can alter the price of its good by adjusting the quantity it supplies to the market, as it faces a downward-sloping demand curve. However, changing the price will affect the quantity sold and potentially the average total cost, so only statement (iii) is correct.

Because a Monopolist Is the Sole Producer in Its Market