If a monopolist wants to increase the amount it sells, it
A) will keep the price the same.
B) must lower the price on all units.
C) must accept lower profits.
D) must lower the cost of production.

Question

Quizplus · Accepted Answer

In order for a monopolist to increase the amount it sells, it must lower the price on all units. This is because, as the only seller in the market, the monopolist has control over the price and can manipulate it to increase demand. By lowering the price, more consumers are willing to purchase the product, resulting in an increase in quantity sold. However, this also means that the monopolist will be earning less profit per unit, which they must accept as a tradeoff. Keeping the price the same or lowering the cost of production may not necessarily result in an increase in quantity sold.

If a Monopolist Wants to Increase the Amount It Sells