It is possible that a multi-product monopolist will reduce the ...

[CORALGRILL2014]

It is possible that a multi-product monopolist will reduce the quality of a product below what its users prefer in order to make more profit.
 
  Indicate whether the statement is true or false

Question 2

An unchallenged monopoly in a product market has a tendency to be lazy, but that tendency can be limited by the capital market.
 
  Indicate whether the statement is true or false

[Mholman93]

Answer to Question 1

T If the products are substitutes and buyers of a high-quality one will pay a high price for it, the monopolist may want to reduce the quality of the other product so it is less attractive as a substitute for the high-priced product.

Answer to Question 2

T A firm that is not achieving the profit that it might can be taken over by a raider, who may sack the underachieving management and install new management.

[CORALGRILL2014]

Gracias!

[jamesnevil303]

Excellent