A monopolist that operates along the elastic range of its demand will find that
A) total revenue increases when price decreases.
B) total revenue decreases when price decreases.
C) marginal revenue is negative.
D) it is more profitable to operate along the inelastic range of the demand curve.

Question

Quizplus · Accepted Answer

When operating in the elastic range of demand, a decrease in price will lead to a larger increase in quantity demanded, resulting in an increase in total revenue. This is because the increase in quantity demanded will outweigh the decrease in price. Therefore, the monopolist will find that total revenue increases when price decreases.

A Monopolist That Operates Along the Elastic Range of Its