Under pure monopoly, a profit-maximizing firm will produce
A)in the inelastic range of its demand curve.
B)in the elastic range of its demand curve.
C)only where marginal costs are decreasing.
D)only where marginal revenue is increasing.

Question

Quizplus · Accepted Answer

A profit-maximizing firm under pure monopoly will produce in the elastic range of its demand curve because it is in this range that lowering the price leads to a proportionately larger increase in quantity demanded, increasing total revenue.

Under Pure Monopoly, a Profit-Maximizing Firm Will Produce