7 . Monopoly and Price Elasticity Consider the relationship between monopoly pricing and the price elasticity of demand. If demand is inelastic, total revenue would increase when a monopolist lowers " its price. As a result, total cost would increase . Therefore, a monopolist will never produce a quantity at which the demand curve is inelastic. Use the purple segment (diamond symbols) to indicate the portion of the demand curve that 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 Inelastic Demand Max TR Price Nrevenue (MR) curve.) Then use the black point (plus symbol) to show the quantity and price that maximizes total revenue (TR). 10 Demand Inelastic Demand W A UT Max TR Price O - N Marginal Revenue A W N 2 3 4 5 6 8 9 10 Quantity