Answer to Question #49410 in Microeconomics for rebecca

Question #49410
Consider a profit maximizing monopolist that employs a uniform pricing strategy. If it were to produce and price at a point on the inelastic segment of its demand curve, then it could: a) raise total revenue by raising price b) reduce total costs by raising price c) raise profits by raising price d) all of the above Suppose a pure monopolist is charging a price of $12 and the associated marginal revenue is $9. Therefore: a) demand is elastic at this price b) demand is inelastic at this price c) the firm is maximizing profits d) total revenue is at a maximum If a monopolist is producing a level of output that maximizes total profit, then it will necessarily be: a) minimizing total cost b) maximizing profit per unit of output c) maximizing total revenue d) maximizing the difference between total revenue and total cost
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Expert's answer
2014-11-27T12:57:26-0500
1. Consider a profit maximizing monopolist that employs a uniform pricing strategy. If it were to produce and price at a point on the inelastic segment of its demand curve, then it could:
a) raise total revenue by raising price
2. Suppose a pure monopolist is charging a price of $12 and the associated marginal revenue is $9. Therefore:
a) demand is elastic at this price
3. If a monopolist is producing a level of output that maximizes total profit, then it will necessarily be:
d) maximizing the difference between total revenue and total cost

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