To maximize its profit, a monopoly should choose a price where demand is:
A) elastic.
B) inelastic.
C) unitary elastic.
D) vertical.

Name: To maximize its profit, a monopoly should choose a price where demand is: A) elastic. B) inelastic. C) unitary elastic. D) vertical.
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Question

Quizplus · Accepted Answer

A monopoly maximizes its profit by choosing a price where demand is elastic because in this range, lowering the price slightly leads to a more than proportional increase in the quantity demanded, increasing total revenue.

To Maximize Its Profit, a Monopoly Should Choose a Price