To maximize profit, a monopolist should charge a higher price in the market with the more inelastic demand curve.

Question

Quizplus · Accepted Answer

If a monopolist charges a higher price in the market with the more inelastic demand curve, they can sell fewer units of the product at a higher price, resulting in higher profits. In a market with a more elastic demand curve, consumers are more sensitive to changes in price and may not be willing to pay a higher price, so the monopolist may need to lower the price to sell more units and maximize profit.

To Maximize Profit, a Monopolist Should Charge a Higher Price