Part 1What is a characteristic of a single-price monopoly? Part 1A single-price monopoly _______. A. experiences economies of scale over the relative portion of the LRAC curve B. can sell a larger quantity only by setting a lower price C. is a price taker D. is a collection of many firms that sell identical goods for the same price

Question

Part 1What is a characteristic of a​ single-price monopoly? Part 1A​ single-price monopoly​ _______. A. experiences economies of scale over the relative portion of the LRAC curve B. can sell a larger quantity only by setting a lower price C. is a price taker D. is a collection of many firms that sell identical goods for the same price

BlackTom AI · Accepted Answer

Consider the nature of a single-price monopoly and what happens when it tries to sell more units.
Option A: 'experiences economies of scale over the relative portion of the LRAC curve' is not a defining feature of a single-price monopoly. Economies of scale describe cost behavior over output, not the basic pricing power or the demand relationship that characterizes a monopoly. A monopoly can have economies of scale, but this statement ties them to a single-price setting in a way that isn’t essential to the concept.
Option B: 'can sell a larger quantity only by setting a lower price' aligns with the downward-sloping demand facing a monopolist. To increase quantity sold, the monopolist must lower the price because consumers respond to price changes with quantity demanded. This captures the core trade-off in monopoly pricing: price and quantity are inversely related along the demand curve.
Option C: 'is a price taker' describes perfect competition, not a monopoly. A price taker accepts the market price; a monopoly sets (or shades) the price it charges. Therefore this statement incorrectly identifies a monopoly’s behavior.
Option D: 'is a collection of many firms that sell identical goods for the same price' describes a perfectly competitive market with many firms and identical products, not a monopoly. A monopoly consists of a single firm, not a group of firms, so this option mischaracterizes the structure.
In summary, Option B accurately reflects the fundamental price–quantity relationship faced by a single-price monopoly, while the other options describe concepts that do not define or properly describe a monopoly’s characteristics.

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