Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 15 - Part V - Monopoly - Questions for Review - Page 323: 3

Answer

The price reduction in order to increase quantity sold doesn't account only for the additional quantity produced, but for the total number produced.

Work Step by Step

If a monopoly decides to increase revenues by increasing production, then it needs to lower the price as well in order for the extra quantity to be sold. By decreasing the price, all the units are affected, not only the additional ones. So, the price reduction doesn't account only for the additional quantity produced, but for the total number produced.
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