CFA Practice Question
In order to increase the amount of output sold, a monopoly must ______
A. increase the price of the last unit sold but maintain the price of all previous units sold.
B. decrease the price of the last unit sold but maintain the price of all other units sold.
C. decrease the price of all units sold.
Explanation: The price of all units of output sold must decrease.
User Contributed Comments 3
| User | Comment |
|---|---|
| rrichmondo | But what if he can price discriminate ? |
| cfahitman | yeh. B sounds correct too if he can price discriminate. Price discrimination supposes to let him selling more output. however the question does not say anything if he can price discriminate or not. |
| dream007 | I agree, B is a plausible answer too |