Young Johnny inherited the only local cable TV company in town after his father passed away.The company is completely unregulated by the government and is therefore free to operate as it wishes.Assuming that Johnny understands the true power of his new monopoly,he is probably most excited about which of the following statements? (i) He will be able to set the price of cable TV service at whatever level he wishes.
(ii) The customers will be forced to purchase cable TV service at whatever price he wants to set.
(iii) He will be able to achieve any profit level that he desires.

Question

Young Johnny inherited the only local cable TV company in town after his father passed away.The company is completely unregulated by the government and is therefore free to operate as it wishes.Assuming that Johnny understands the true power of his new monopoly,he is probably most excited about which of the following statements? (i)	He will be able to set the price of cable TV service at whatever level he wishes.
(ii)	The customers will be forced to purchase cable TV service at whatever price he wants to set.
(iii)	He will be able to achieve any profit level that he desires.

Quizplus · Accepted Answer

Johnny can set the price at whatever level he wishes, but customers are not forced to purchase if they find the price too high, and he cannot achieve any profit level he desires due to demand constraints.

Young Johnny Inherited the Only Local Cable TV Company in Town