A monopoly firm can sell its fourth unit of output for a price of $250. In order to sell more than five units, it must expect to receive a price:
A) equal to $250.
B) greater than $250.
C) less than $250.
D) equal to $340.

Question

Quizplus · Accepted Answer

In a monopoly, to sell additional units beyond a certain point, the firm typically has to lower the price of all units sold. This is because the demand curve faced by a monopolist is downward sloping, meaning that to sell more units, the price per unit must decrease.

A Monopoly Firm Can Sell Its Fourth Unit of Output