I think many people here are living a little in the past- we live in a world where internet access means lots of people and the media have lots of access to lots of information and the media will use it to stay in business.
The real fault here is with Monarch management who have said nothing to dispel this and made no statement as to the airline's actual position - and appear to have mis-mananged the company (or perhaps got into to something they shouldn't have when they bought it). I can't imagine the management of Ryanair, BA EasyJet getting into this mess.
As for Monarch slashing prices- they may not have to; their yield management system may do it for them to try to keep the aeroplanes full.