"A monopolist can charge whatever price it wants." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. The monopolist is limited by the demand curve it faces. Even a monopolist produces a good that has substitutes, even if they are imperfect substitutes. The more substitutes and the better some of them are as substitutes, the more elastic the demand curve of the monopolist.
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Suppose China decides to sell a vast majority of their large holdings of U.S. Treasury bonds. If you are thinking of refinancing your house, how would China's action affect your decision to refinance?
A) You would want to wait to refinance as interest rates should rise. B) China's actions should not affect your decision to refinance in any way. C) You would want to refinance as soon as possible as interest rates should rise. D) You would want to wait to refinance as interest rates should fall.
Public schools in the United States get most of their operating funds from
A) income taxes on corporate profits. B) tariffs collected on imported goods. C) local property taxes. D) government production and subsidies.