If a monopolist were to produce in the inelastic segment of its demand curve,
A)total revenue would be at a maximum.
B)marginal revenue would be positive.
C)the firm would not be maximizing profits.
D)it would necessarily incur a loss.

Question

Quizplus · Accepted Answer

Producing in the inelastic segment means that reducing output would increase total revenue and reduce costs, thus increasing profits. Therefore, the firm is not maximizing profits in this segment.

If a Monopolist Were to Produce in the Inelastic Segment