If a pure monopolist is operating in a range of output where demand is elastic,
A)it cannot possibly be maximizing profits.
B)marginal revenue will be positive but declining.
C)marginal revenue will be positive and rising.
D)total revenue will be declining.

Question

Quizplus · Accepted Answer

When demand is elastic, a decrease in price leads to an increase in total revenue, meaning marginal revenue is positive. However, as output increases, marginal revenue declines because each additional unit adds less to total revenue than the previous one.

If a Pure Monopolist Is Operating in a Range of Output