If a monopolist were to produce in the inelastic segment of its demand curve,
A) total revenue would be at a maximum.
B) marginal revenue would be positive.
C) the firm would not be maximizing profits.
D) it would necessarily incur a loss.

Question

Quizplus · Accepted Answer

In the inelastic segment of the demand curve, increasing output would decrease total revenue, as price reductions lead to proportionally smaller increases in quantity demanded. Thus, the firm would not be maximizing profits.

If a Monopolist Were to Produce in the Inelastic Segment