If a monopolist is producing a level of output at which demand is inelastic,then

Question

Quizplus · Accepted Answer

If demand is inelastic, increasing production would lead to a decrease in total revenue, as the increase in sales volume would not be enough to offset the decrease in the price due to the inelastic demand. Therefore, the monopolist is not maximizing profit by producing at the current level of output. Additionally, when demand is inelastic, marginal revenue is negative, so B is incorrect. Hence, both options A and C are correct, making E the best choice.

If a Monopolist Is Producing a Level of Output at Which