Which of the following output levels will a profit-maximizing monopolist NOT produce at?
A) where marginal cost is less than average total cost
B) where it suffers economic losses in the short run
C) where demand is inelastic
D) where demand is elastic

Question

Quizplus · Accepted Answer

A profit-maximizing monopolist will not produce at a level where demand is inelastic because in this range, lowering the quantity produced would increase total revenue and potentially profits, as the price increase would be proportionally higher than the decrease in quantity sold.

Which of the Following Output Levels Will a Profit-Maximizing Monopolist