Which of the following is (are) true of a monopoly?
(i)A monopoly has the ability to set its price.
(ii)A monopolists marginal revenue will always increase when it lowers the price of its product.
(iii)A monopoly can never experience an economic loss.

Question

Quizplus · Accepted Answer

A monopoly has the ability to set its price because it is the sole provider of a good or service. However, a monopolist's marginal revenue does not always increase when it lowers the price, and a monopoly can experience economic losses if its costs exceed its revenues.

Which of the Following Is (Are) True of a Monopoly