Question: Why would a monopolist never knowingly operate in the inelastic portion of its demand curve?

Why would a monopolist never knowingly operate in the inelastic portion of its demand curve?    

Step by Step Solution

★★★★★

3.40 Rating (166 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

To maximize its profits a monopolist will produce the ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Microeconomics Questions!

Q:

Why does a profit-maximizing monopolist never produce on an inelastic portion of the demand curve? Would a revenue-maximizing monopolist ever produce on the inelastic portion of the demand curve?

Q:

Why is a firms demand for labor curve more inelastic when the firm has monopoly power in the output market than when the firm is producing competitively?

Q:

A monopolist has an inverse demand curve given by p(y) = 12 y and a cost curve given by c(y) = y2. (a) What will be its profit-maximizing level of output? _____. (b) Suppose the government decides...

Q:

True or False: 1. The marginal revenue curve for a monopolist lies below the demand curve. 2. For a monopoly to get revenue from marginal customers, the firm has to lower the price so that marginal...

Q:

Question 1 [10] 1.1. If the income elasticity of demand for a product is 1.0 and if the consumer's income increases by 10%, the proportion of income spent on this product _____ A. increases by 10%....

Q:

Question content area Part 1 Which of the following statements is FALSE? Part 2 A . Typically there are numerous very close substitutes for the product of a monopolist. B . For a profit - maximizing...

Q:

(Revenue Curves)Why would a monopoly firm never knowingly produce on the inelastic portion of its demand curve?

Q:

Section A: Short Answers - True/False Answer four (4) of the following five (5) questions in this section as described for each question. Where appropriate, be sure to justify your responses along...

Q:

Section A: Short Answers - True/False Answer four (4) of the following five (5) questions in this section as described for each question. Where appropriate, be sure to justify your responses along...

Q:

MULTIPLE CHOICE QUESTIONS: Select the best answer for each of the following questions. 7. If two market baskets lie on the same indifference curve then a) the two market baskets cost the same b) the...

Q:

In problems, find each integral. (a) « e3x+1 dx (b) (c) xedx (x3)e6xdx

Q:

If X and Y are independent standard normal random variables, determine the joint density function of U = XV= X/Y Then use your result to show that X/Y has a Cauchy distribution.

Q:

Suppose the corporate tax rate is 2 5 % . Consider a firm that earns $ 2 , 5 0 0 in earnings before interest and taxes each year with no risk. The firm's capital expenditures equal its depreciation...

Q:

2. Define the terms over- and under-pathologizing in relation to cultural knowledge.

Q:

Monopsony power is more likely to be present when high _________ and _________ costs are involved.

Q:

When a market consists of a single buyer, we say _________ exists.

Q:

If unions are successful in raising union wages, the result will be _________ wages in the nonunion sector.

Q:

Here are some important figures from the budget of Crenshaw, Inc., for the second quarter of 2019: April $404,000 181,000 May $353,000 169,000 June $ 441,000 202,000 Credit sales Credit purchases...

Q:

We've always treated bond pricing as if we have a constant return. We know that cash flows given at different times are discounted slightly differently when we think about the yield curve. Let's go...

Q:

You have been given the following return information for a mutual fund, the market index, and the risk-free rate. You also know that the return correlation between the fund and the market is 0.97....