When a firm operates under conditions of monopoly, its price is
A)not constrained.
B)constrained by marginal cost.
C)constrained by demand.
D)constrained only by its social agenda.

Question

Quizplus · Accepted Answer

In a monopoly, the firm is the sole provider of a good or service, which means its ability to set prices is constrained by the demand for its product. The firm can set prices to maximize profits, but it must consider how higher prices might reduce demand.

When a Firm Operates Under Conditions of Monopoly, Its Price