Suppose a monopolist produces output where total revenue is maximized.At that output,the price elasticity of demand for the monopolist's output is:

Question

Quizplus · Accepted Answer

At the output where the monopolist's total revenue is maximized, the monopolist produces a quantity where marginal revenue (MR) equals zero. At this point, the price elasticity of demand is equal to 1 (unit elasticity) because any changes in price would lead to an equal proportionate change in quantity demanded, resulting in no change in total revenue. Therefore, the correct answer is C.

Suppose a Monopolist Produces Output Where Total Revenue Is Maximized