In response to a cost-reducing technological breakthrough in the production of its product, a profit-maximizing monopolist will normally
A)increase price and decrease production.
B)not change its level of output or price.
C)decrease the price it charges for its product.
D)increase its output and practice price discrimination.

Question

Quizplus · Accepted Answer

A cost-reducing technological breakthrough allows a monopolist to produce at a lower cost, leading to a potential increase in supply. To sell this increased supply, the monopolist is likely to decrease the price it charges for its product, making option C correct.

In Response to a Cost-Reducing Technological Breakthrough in the Production