Answer to Question #75980 in Microeconomics for Sizakele

Question

Ab limited is a sole manufacturer and supplier of a solar panels in the country. As a result of this the CEO claimed in a recent meeting that he can set any price as he wishes and sell as many units of his products as he wants at that price. Is this correct.?motivate your answer

Answer 1

Ab limited has no competitors in the industry. Therefore, the company is a monopolist. The firm can affect prices, and quantity supplied but not infinitely. Ab depends on the wealth of the population and production expenses. A monopolist maximizes profit when its marginal costs are equal to marginal revenue. An intersection of two curves (MC and MR) defines the optimal quantity and price for Ab limited.