Say a monopolist knew that at the current price for its product demand is inelastic. If marginal costs for this firm are zero, then in order to maximize profits this monopolist should
A)increase output.
B)reduce output.
C)keep output at the same level.
D)decrease its price.

Question

Quizplus · Accepted Answer

When demand is inelastic, reducing output will increase total revenue and, since marginal costs are zero, also increase profits.

Say a Monopolist Knew That at the Current Price for Its