7 . Monopoly and Price Elasticity Consider the relationship between monopoly pricing and the price elasticity of demand. If demand is inelastic and a monopolist raises its price, quantity would fall by a V percentage than the rise in price, causing profit to V . Therefore, a monopolist will Y produce a quan h the demand curve is elastic. Use the purple segment (diamond symbols) to indicate the portion of the dema at is inelastic. (Hint: The answer is related to the marginal- revenue (MR) curve.) Then use the black point (plus symbol) to show the quantity and price that maximizes total revenue (TR). 10 Demand 9 00 8 7 Inelastic Demand 6 _ + 5 . 4 Max TR a: 3 .9 i 2 1 0 i 1 -2 Marginal Revenue .3 _ -4 - _5 _ Quantity \f. Therefore, a monopolist will sometimes segment ( diamond symbols ) to port never urve. ) Then use the black poin () to always