Concept:A monopolist is the single seller in the market, but he cannot independently fix both price and output at the same time.
Explanation:Under monopoly, the monopolist faces the whole market demand curve, which slopes downward to the right.
Therefore, the average revenue curve is not horizontal; option A is wrong.
Also, the demand curve and the marginal revenue curve are not the same.
For a monopolist, marginal revenue is less than average revenue (
MR<AR), so option C is wrong.
The monopolist can either fix the price and allow output to be determined by demand, or fix the output and allow the price to be determined by demand.
He cannot choose both price and output independently because a downward-sloping demand curve links them.
Thus, the correct statement is that the monopolist determines either price or output, but not both.
Answer:D. He determines either price or output.