Question

In a monopoly, the price is an increasing function of?

1) the elasticity of demand
2) the elasticity of supply
3) demand
4) per unit subsidies received from the government

Answer 1

In a monopoly, the price is an increasing function of demand.

Step-by-step explanation:

In a monopoly, the price is an increasing function of demand. When a monopolistic firm has control over the market and faces limited competition, it can increase prices to maximize its profits. The demand curve for a monopoly is downward sloping, meaning that as the price increases, the quantity demanded decreases.