If a monopolist wishes to sell an additional unit of the good, then
A)it must raise its price to signal consumers that its product is now a more important part of their budget, and they will purchase more.
B)like a competitive firm, it can simply make more output available and not lower price.
C)it must lower price.
D)it can raise price and not worry that sales will decrease.

Question

Quizplus · Accepted Answer

A monopolist faces a downward sloping demand curve, meaning that in order to sell an additional unit of the good, it must lower the price. If it were to raise the price, consumers would purchase fewer units, and the monopolist would not be able to sell the additional unit. Therefore, option C is the correct answer.

If a Monopolist Wishes to Sell an Additional Unit of the Good