Asked by
Daniel Brandao
on Nov 26, 2024
Verified
A pure monopoly firm will never charge a price in the inelastic range of its demand curve because lowering price to get into this region will
A) increase total revenue, increase total cost, and decrease profit.
B) decrease total revenue, increase total cost, and decrease profit.
C) increase total revenue, decrease total cost, and decrease profit.
D) decrease total revenue, total cost, and profit.
Pure Monopoly Firm
A market structure where a single entity exclusively controls the supply of a product or service without any close substitutes.
Inelastic Range
A portion of the demand curve where changes in price have little to no effect on the quantity demanded of a good or service.
Demand Curve
The demand curve graphically represents the relationship between the price of a good and the quantity demanded by consumers over a certain period, typically showing a downward slope from left to right.
- Determine the behavior that maximizes profits for monopolists across diverse market scenarios.
- Differentiate between elastic and inelastic sections of the demand curve for monopolists and understand their consequences for revenue generation and production levels.
Verified Answer
SD
Learning Objectives
- Determine the behavior that maximizes profits for monopolists across diverse market scenarios.
- Differentiate between elastic and inelastic sections of the demand curve for monopolists and understand their consequences for revenue generation and production levels.