If a natural monopoly faces a relatively inelastic consumer demand over the range of the production, it will have an incentive to:
A) charge a low price.
B) charge a high price.
C) sell more.
D) advertise more.

Question

Quizplus · Accepted Answer

A natural monopoly with inelastic demand can increase total revenue by charging a higher price, as consumers are less sensitive to price changes and will continue to purchase the product.

If a Natural Monopoly Faces a Relatively Inelastic Consumer Demand