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True about a monopoly

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Reference no: EM13697442

1. Suppose a firm is currently maximizing its profits (i.e., following the MR = MC rule). Assuming that it wants to continue maximizing its profits, if its fixed costs increase, it should

a. maintain the same price

b. raise its price

c. lower its price

d. not enough information to answer this question

2. Which of the following is true about a monopoly?

a. Its demand curve is generally less elastic than in more competitive markets.

b. It will always earn economic profit.

c. It will charge the highest possible price.

d. It will always be subject to government regulations.

Reference no: EM13697442

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