How is the aim of retail monopolies achieved?

• A. High pricing with no incentive for price reduction or promotion.
• B. Frequent price reductions to attract customers.
• C. Constant promotional activities across all products.
• D. Open access for all producers.

Answer: (A)

Retail monopolies rely on pricing power gained from limited competition. When buyers don’t have close substitutes, the monopolist can set higher prices and still sell enough to stay profitable. Because demand is not highly sensitive to price, there’s little motivation to lower prices or run promotions; doing so would squeeze margins without attracting proportionally more sales. Frequent discounts or broad promotions would undermine the ability to maintain those higher prices. Opening access to all producers would bring substitutes and competition, eroding the monopoly’s advantage. So, high pricing with minimal incentive to reduce prices or promote best reflects how a retail monopoly sustains its position.