Question: Show that after a shift in the demand curve a
Show that after a shift in the demand curve, a monopoly’s price may remain constant but its output may rise.
Answer to relevant QuestionsDoes it affect a monopoly’s profit if it chooses price or quantity (assuming it chooses them optimally)? Why can’t a monopoly choose both price and quantity? At the profit-maximizing quantity in figure, what is the elasticity of demand? What is the Lerner Index?Show mathematically that a monopoly may raise the price to consumers by more than a specific tax imposed on it. Why are newsstand prices higher than subscription prices for an issue of a magazine?A jean manufacturer would find it profitable to charge higher prices in Europe than in the United States if it could prevent resale between the two countries. What techniques can it use to discourage resale?
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