A monopolist can charge a high price if:
A)the quantity demanded is positively related to price.
B)the demand is relatively price-elastic.
C)the demand curve is negatively sloped.
D)the demand is relatively price-inelastic.
E)there exist a large number of substitutes.

Question

Quizplus · Accepted Answer

A monopolist can charge a high price when the demand for their product is relatively price-inelastic, meaning that changes in price have little effect on the quantity demanded. This is because when demand is inelastic, consumers are not very sensitive to changes in price and will continue to purchase the product even if the price is relatively high.

A Monopolist Can Charge a High Price If