A monopoly responds to an increase in demand by _______ price and _______ output.
A) increasing; decreasing
B) increasing; increasing
C) decreasing; increasing
D) decreasing, decreasing

Question

Quizplus · Accepted Answer

A monopoly responds to an increase in demand by increasing both price and output. This is because, with higher demand, the monopoly can charge a higher price due to the lack of competition, and it will also produce more to meet the increased demand.

A Monopoly Responds to an Increase in Demand by _______