A monopoly firm can sell its fourth unit of output for a price of $250. In order to sell more than five units, it must expect to receive a price:
A) equal to $250.
B) greater than $250.
C) less than $250.
D) equal to $340.
E) the price is impossible to calculate with the information given.

Question

Quizplus · Accepted Answer

In a monopoly, to sell additional units, the firm typically has to lower the price due to the downward-sloping demand curve. Therefore, to sell more than five units, the price must be less than $250.

A Monopoly Firm Can Sell Its Fourth Unit of Output