A monopoly firm will never operate in the _______ range of the _______ curve.
A) inelastic; supply
B) elastic; demand
C) inelastic; demand
D) elastic; supply

Question

Quizplus · Accepted Answer

A monopoly firm has the power to control the price of its product, and in order to maximize profits, it will always operate in the elastic range of the demand curve, where it can increase its price without losing too many customers. Therefore, a monopoly firm will never operate in the inelastic range of the demand curve, where a price increase would cause a significant decrease in quantity demanded.

A Monopoly Firm Will Never Operate in the _______ Range