A single seller can set a high price for its product because
A)the product has a high elasticity of demand.
B)the factors that motivate a monopoly are not the same as the factors that motivate a competitive firm.
C)the product is price-inelastic.
D)there are no other sellers of the product to undercut the price.
E)the product has many close substitutes.

Question

Quizplus · Accepted Answer

A single seller can set a high price for its product if there are no other sellers to undercut the price. This is because the lack of competition gives the seller the power to control the price without fear of losing customers to competitors who offer a lower price. This is the defining characteristic of a monopoly market structure.

A Single Seller Can Set a High Price for Its