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 - Quick Check Multiple Choice - Page 324: 3

Answer

d. stay the same, decrease

Work Step by Step

If a monopoly’s fixed costs increase, its price will stay the same because the price is not related to fixed costs, but to the demand curve of the monopoly. Its profit will decrease because the profit equals revenues - costs. Revenues stay the same while the costs increase, which makes the profit decrease.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.