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Title: evaluate the statement :"A monopolist can charge whatever she wants because she Post by: Rain84 on Oct 26, 2014 can someone help with this Evaluate this statement: "A monopolist can charge whatever she wants because she is the only source available."
Title: Re: evaluate the statement :"A monopolist can charge whatever she wants because she Post by: bio_man on Oct 26, 2014 The statement is false. The monopolist can only choose one of the variables: either what price to charge or what quantity to produce. She cannot choose both. Once the monopolist chooses a price, she is constrained to sell only so much as demanded by consumers at that price, given by the demand curve. To give an example, if a monopolist chooses an arbitrarily high price, she may be able to sell any of its output is the demand at that price is zero. Decision wise, the monopolist chooses a price (or quantity) to maximize profits.
Title: Re: evaluate the statement :"A monopolist can charge whatever she wants because she Post by: agelessperson on Oct 26, 2014 No, even the monopolist has to reduce price to sell more. That is the reason why MR is under the demand curve in this market. But if it knows the customer so well, it can use the price differentiation policy and take all of consumer surplus away. But normal consumers are not that stupid.
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