The following question are based on the following diagram of a monopolist:

-The monopolist can set a price well above the competitive supply and demand level by
A) advertising to expand the market.
B) pushing the supply curve as far to the right as it will go.
C) restricting output.
D) using technology to speed production.
E) setting price equal to average cost.

Question

The following question are based on the following diagram of a monopolist:
 
-The monopolist can set a price well above the competitive supply and demand level by
A) advertising to expand the market. 
B) pushing the supply curve as far to the right as it will go. 
C) restricting output. 
D) using technology to speed production. 
E) setting price equal to average cost.

Quizplus · Accepted Answer

By restricting output, the monopolist reduces the quantity supplied and drives up the price, resulting in a price well above the competitive supply and demand level. Advertising, technology, and setting price equal to average cost do not necessarily lead to a price above the competitive level, and pushing the supply curve to the right may actually lower the price.

The Following Question Are Based on the Following Diagram of a Monopolist