Because a monopolist is the sole producer in its market,it can necessarily alter the price of its good (i) without affecting the quantity sold.
(ii) without affecting its average total cost.
(iii) by adjusting the quantity it supplies to the market.
A)(ii) only
B)(iii) only
C)(i) and (ii)
D)(ii) and (iii)

Question

Because a monopolist is the sole producer in its market,it can necessarily alter the price of its good (i)	without affecting the quantity sold.
(ii)	without affecting its average total cost.
(iii)	by adjusting the quantity it supplies to the market.
A)(ii) only
B)(iii) only
C)(i) and (ii)
D)(ii) and (iii)

Quizplus · Accepted Answer

As a monopolist is the sole producer in the market, it has control over the price of its good. It can raise the price and reduce the quantity sold, or lower the price and increase the quantity sold. However, the monopolist cannot alter the price without affecting its average total cost as the production cost will change with the change in the quantity produced. It can also adjust the quantity it supplies to the market to affect the price, as this will change the level of scarcity and perceived value of the good. Therefore, (ii) and (iii) options are correct, and (i) is incorrect.

Because a Monopolist Is the Sole Producer in Its Market,it