"A profit-maximizing monopoly never produces an output in the inelastic range of its demand curve." True or false? Explain
What will be an ideal response?
The statement is true. The profit maximizing condition is MC = MR. If demand is inelastic, marginal revenue is negative. But marginal cost is never negative. So it's impossible to maximize profit producing an output in the inelastic range of the demand curve.
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The Index of Economic Freedom measures the market concentration in an economy
a. True b. False Indicate whether the statement is true or false
Refer to the above graph. The profit-maximizing monopolist shown sets its price at:
A. 0H. B. 0K. C. 0G. D. 0J.
If a unit excise tax is placed on a good for which the demand is very unresponsive to a price change, then
A. producers and consumers pay equal portions of the tax. B. the consumers generally pay the majority of the tax. C. the producers generally pay the majority of the tax. D. the government generally pays the majority of the tax.
In a well-functioning financial market, the only way to get consistently higher returns over the long run is to take more risks. This is known as the
A. risk-return principle. B. fixed income principle. C. price appreciation principle. D. diversification principle.