Solved

Which of the Following Is a Possible Explanation for the Fall

Question 22

Multiple Choice

Which of the following is a possible explanation for the fall in prices after an industry is monopolized by combining a group of competitors?


A) A monopolist faces a downward sloping demand curve.Hence, output expansion leads to lower prices.
B) A reduction in price increases producer surplus.Hence a monopolist may reduce the price of his product.
C) A monopolist may reduce prices to make it difficult for other firms to compete.
D) A monopolist can increase profits by reducing price when its cost of production declines due to increased size of the new firm.The fall in price is less than the decline in cost.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents