Answer to Question #166848 in Microeconomics for bunz

Question

• Whenever a monopolist reduces prices, its revenue will decrease. TRUE or FALSE? 

Answer 1

Since the monopolist is the only firm in the market, its demand curve is the same as the market demand curve (downward-sloping). As a result, if the monopolist will reduce the price, the quantity sold will increase but the total revenue will decrease. Therefore, the answer is true.