A monopoly
A) raises the price it can charge for its product by decreasing the quantity sold.
B) raises the price it can charge for its product by increasing the quantity sold.
C) faces a perfectly elastic demand curve.
D) does not need to take account of demand because it's the only seller.

Question

Quizplus · Accepted Answer

A monopoly can raise the price of its product by decreasing the quantity sold because it faces a downward-sloping demand curve. By reducing the quantity, it can exploit its market power to charge higher prices, as consumers have fewer alternatives.

A Monopoly