When the price of a good increases, which of the following happen(s) to the quantity sold for a monopoly firm?
(i) customers are forced to buy at the higher price
(ii) quantity sold will stay the same
(iii) revenue will necessarily increase
(iv) quantity sold will fall
A)(i) and (iii)
B)(i), (ii), and (iii)
C)(iii) and (iv)
D)(iv) only

Question

Quizplus · Accepted Answer

For a monopoly firm, when the price of a good increases, the quantity sold will fall due to the law of demand. Customers are not forced to buy at the higher price, and the quantity sold does not necessarily stay the same. Revenue may not necessarily increase because the decrease in quantity sold could offset the price increase.

When the Price of a Good Increases, Which of the Following