If a monopolist wishes to sell an additional unit of the good, then which of the following must occur?

• A. The monopolist can increase the price to sell the extra unit.
• B. The monopolist must raise the price on all units sold.
• C. The monopolist can sell the extra unit at the same price as previous units without affecting total revenue.
• D. The monopolist must lower the price on all units sold.

Answer: (D)

Verified step by step guidance

1. Understand the nature of a monopolist's demand curve: it is downward sloping, meaning the monopolist faces the entire market demand and must lower the price to sell more units.
2. Recognize that to sell an additional unit, the monopolist cannot increase the price because higher prices reduce quantity demanded; thus, the first option is incorrect.
3. Note that the monopolist must lower the price on all units sold to increase quantity demanded, because the price is uniform for all units in a single-price monopoly.
4. Understand that lowering the price on all units sold means the marginal revenue from selling an additional unit is less than the price of that unit, due to the price reduction on previous units.
5. Conclude that the monopolist must reduce the price on all units sold to sell an additional unit, which aligns with the correct answer: 'The monopolist must lower the price on all units sold.'