A monopolist that does not practice price discrimination should never produce in the

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Quizplus · Accepted Answer

A monopolist that does not practice price discrimination should produce in the inelastic portion of its demand curve because it can increase total revenue and reduce total costs by increasing the price. In the inelastic portion of the demand curve, a price increase leads to a smaller decrease in quantity demanded, which means the total revenue will increase when the price is raised. Moreover, as the monopolist does not practice price discrimination, it charges the same price to all customers. Hence, producing in the inelastic portion will allow the monopolist to charge the highest price possible while still selling some quantity of the product.

A Monopolist That Does Not Practice Price Discrimination Should Never