A profit-maximizing monopoly will NEVER produce along a range of output for which
A) the demand curve is elastic.
B) the demand curve is inelastic.
C) the price elasticity of demand is greater than 1.
D) the price elasticity of supply is greater than 1.

Question

Quizplus · Accepted Answer

A profit-maximizing monopoly will never produce in a range where the demand curve is inelastic because in this range, lowering the price increases total revenue, and the firm can increase profits by producing and selling more at a lower price.

A Profit-Maximizing Monopoly Will NEVER Produce Along a Range of Output