Since a monopolist firm will lose some customers when the price is increased, it will make every effort to keep the price as low as possible.

Question

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In a monopoly, there are no or limited close substitutes for the product or service offered by the firm. Therefore, the monopolist can increase the price without losing many customers. This is because customers do not have many options to turn to. Hence, a monopolist can raise prices to increase profits.

Since a Monopolist Firm Will Lose Some Customers When the Price