For any constant-elasticity market demand curve, a monopolist is profit maximizing regardless of what quantity he produces so long as marginal costs are zero.

Question

Quizplus · Accepted Answer

A monopolist's profit maximizing quantity is where marginal revenue equals marginal cost, not necessarily zero marginal cost. While a zero marginal cost would lead to a larger profit margin, it is not the sole determining factor for profit maximization.

For Any Constant-Elasticity Market Demand Curve, a Monopolist Is Profit