Depending on the shape of the marginal cost curve, a monopolist might produce an output level on the elastic or the inelastic part of demand.

Question

Quizplus · Accepted Answer

A monopolist will always produce on the elastic portion of the demand curve because producing on the inelastic portion would mean that reducing output would increase total revenue and reduce total cost, thus increasing profit.

Depending on the Shape of the Marginal Cost Curve, a Monopolist