A monopolist will maximize its profits by charging a higher price for customers with a price elasticity of

Question

Quizplus · Accepted Answer

A monopolist would want to charge a higher price to customers with a lower price elasticity of demand, as they would be less likely to reduce their purchases significantly in response to a price increase. A price elasticity of 0.1 indicates an extremely inelastic demand, which means that customers are not very sensitive to changes in price. This would make them a target for the monopolist to charge a higher price and maximize profits.

A Monopolist Will Maximize Its Profits by Charging a Higher