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20 July, 14:44

Monopolists do not worry about efficient production and minimizing costs since they can just pass along any increase in costs to their consumers." This statement is

a. false; price increases will mean fewer sales, which may lower profits.

b. true; this is the primary reason why economists believe that monopolies result in economic inefficiency.

c. false; the monopolist is a price taker.

d. true; consumers in a monopoly market have no substitutes to turn to when the monopolist raises prices

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  1. 20 July, 18:37
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    a. false; price increases will mean fewer sales, which may lower profits.

    Explanation:

    In a monopoly market structure, price is the amount customers are willing to pay for a product or service. All things remaining constant, a monopoly has to reduce its prices to increase its sales volume. A Monopoly is the single supplier of particular products and has are no close substitutes.

    The Demand curve of a monopoly is the same as the industry's demand curve and is downward sloping. An increase in price will cause a decline in demand. Should the cost of inputs increase for a monopoly, its sales may decrease in it increases its prices. Fewer customers will afford the products of a monopoly at an increased price.
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