In 1999,a judge declared that Microsoft was a monopolist.Assuming that Microsoft has a linear demand curve and that it is maximizing its profits at its current level of output,we may conclude that,if Microsoft were to increase its price,its total revenue would:
A)rise.
B)fall.
C)remain unchanged.
D)There is insufficient information to make a determination.

Question

Quizplus · Accepted Answer

If Microsoft were to increase its price, its linear demand curve would result in a decrease in the quantity demanded. As a result, the total revenue of Microsoft would fall. This is because the increase in revenue from higher prices is less than the decrease in revenue from the lower quantity demanded. Therefore, the best answer is B.

In 1999,a Judge Declared That Microsoft Was a Monopolist