To maximize profit the monopolist should set a:
A) lower price in markets with less elastic demand.
B) lower price in markets with more inelastic demand.
C) higher price in markets with more elastic demand.
D) higher price in markets with more inelastic demand.

Question

Quizplus · Accepted Answer

The monopolist should set a higher price in markets with more inelastic demand. This is because inelastic demand means that changes in price have little effect on the quantity demanded. Therefore, the monopolist can increase the price without losing many customers and maximize profits. In contrast, lower prices are needed in markets with more elastic demand because small price increases can lead to a significant reduction in the quantity demanded which would result in lower profits.

To Maximize Profit the Monopolist Should Set A