In 1999, a judge declared that Microsoft was a monopolist.Assuming that it is maximizing its profits at its current level of output, we may conclude that the absolute value of the price elasticity of demand for its systems is:

Question

Quizplus · Accepted Answer

For a monopolist maximizing profits, the price elasticity of demand must be greater than 1 (elastic) because if it were less than or equal to 1, the firm could increase profits by raising prices.

In 1999, a Judge Declared That Microsoft Was a Monopolist