The diagram below shows total revenue for a single- price monopolist. FIGURE 10- 3
-Refer to Figure 10- 3. The price elasticity of demand at Q3 is

Question

The diagram below shows total revenue for a single- price monopolist.  FIGURE 10- 3
-Refer to Figure 10- 3. The price elasticity of demand at Q3 is

Quizplus · Accepted Answer

At Q3, the slope of the demand curve is steeper than at Q2, indicating a higher price elasticity of demand. As a monopolist, the firm must lower price to sell more units, indicating that the elasticity is greater than 1 (elastic). Therefore, the correct answer is (A) less than 1.

The Diagram Below Shows Total Revenue for a Single- Price