Identify some of the basic assumptions of ...

[tichca]

Identify some of the basic assumptions of monopoly.

Question 2

A monopolist can charge a high price if:
 a. the quantity demanded of its product is positively related to price.
  b. the demand for its product is relatively price-elastic.
  c. the demand curve for its product is negatively sloped.
  d. the demand for its product is relatively price-inelastic.
  e. there exist a large number of substitutes for its product.

[joshraies]

Answer to Question 1

A monopolist produces a homogeneous product and knows with certainty the demand curve he/she faces. The monopolist always aims to maximize his/her profits and does not consider possible reactions of future competitors.

Answer to Question 2

d