Which of the following statements is are) true of a monopoly? i) A monopoly has the ability to set the price of its product at whatever level it desires.
Ii) A monopoly's total revenue will always increase when it increases the price of its product.
Iii) The more a monopoly increases output, the higher the profits.

Question

Quizplus · Accepted Answer

A monopoly has the ability to set the price of its product at whatever level it desires, as there are no close substitutes available in the market. However, increasing the price of the product does not always lead to an increase in total revenue, as demand may decrease significantly with a higher price. Additionally, increasing the output does not always lead to higher profits, as the marginal cost may increase with higher levels of production.

Which of the Following Statements Is Are) True of a Monopoly