In response to increasing demand, a monopolist will?

Question

a) increase price

b) decrease ouput, increase price

c) increase output and maintain price

d) increase price, maintain output

e) maintain price and output

Answer 1

c) increase output and maintain price

Higher demand will mean new MR=MC equilibrium, and depending on MC and demand curves slopes price may stay the same (or fall/increase).

Answer 2

Increasing price is definitely one of the reactions from a monopoly, but I don't think the business would maintain or decrease output; so your best bet is a)