A monopoly will always sell rather than rent its product. Indicate wh

A monopoly will always sell rather than rent its product.

Indicate whether the statement is true or false

ANSWER

F If the product is durable, consumers may fear the monopolist who sells it will keep lowering the price, causing the value of their purchase to decline. So they may refuse to buy. If the monopolist rents, this avenue of lowering price to discriminate is no longer an option in that the monopoly will suffer any negative effects of doing so. Consumers realize this and by renting the monopolist may win their business.