Answer to Question #75588 in Microeconomics for njabulo magagula

Question #75588
Lonewolf Ltd is the sole manufacturer and supplier of solar panels in the country. As a result of this the CEO claimed in a recent meeting that he can set any price he wishes and sell as many units of his product as he wants at that price. Is this correct? Motivate your answer.
1
Expert's answer
2018-04-06T05:12:10-0400
CEO of Lonewolf is mistaken, since the quantity of units sold at a certain price is still determined by the demand curve, which has a downward character. At the same time, solar panels are not a basic commodity, so the demand for them will be elastic, i.e. with an increase in the price, the quantity of units sold will decrease to a greater extent, and the total revenue will fall.

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