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A monopolist

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Please make comments about these two statements.

1. A monopolist can charge whatever they want to, afterall, they are the sole supplier!

2. Monopolists should not advertise since they have no competitors and cannot benefit therefrom.

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Solution Preview

1. A monopolist cannot charge whatever they want because while they are the sole supplier of a product, for many products there are alternatives, including, doing without the good or service. For example, say 95% of the population makes $40,000 or less per year, a landline monopoly (where there aren't even cell phones or internet) cannot charge over $40,000 a year for a phone line because people will simply do without ...

Solution Summary

This solution provides an assessment of two statement made about monopolies.

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