A profit-maximizing monopolist will never produce at an output level where:
A) demand is elastic.
B) it suffers economic losses in the short run.
C) demand is inelastic.
D) marginal cost is less than average total cost.

Question

Quizplus · Accepted Answer

A profit-maximizing monopolist will not produce where demand is inelastic because increasing output would decrease total revenue, as the percentage decrease in price would outweigh the percentage increase in quantity sold.

A Profit-Maximizing Monopolist Will Never Produce at an Output Level