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Author Question: A single-price monopolist will always charge a price that is on the elastic range of its demand. ... (Read 55 times)

CORALGRILL2014

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on: Jun 29, 2018
A single-price monopolist will always charge a price that is on the elastic range of its demand. Explain why the previous statement is correct or incorrect.
 
  What will be an ideal response?

Question 2

The marginal social benefit is the sum of the benefit enjoyed by the consumer of an additional unit of a good or service plus the marginal benefit enjoyed by others.
 
  Indicate whether the statement is true or false


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ladyjames123

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The statement is correct. Only when the demand is elastic is marginal revenue positive. (When demand is unit elastic, marginal revenue is zero and when demand is inelastic marginal revenue is negative.) Because marginal cost is always positive, a single-price monopolist will always produce in the elastic range of its demand because it produces where marginal cost equals marginal revenue. Hence the price that the monopolist sets will always be on the elastic range of its demand.

Answer to Question 2

TRUE


CORALGRILL2014

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Reply 2 on: Jun 29, 2018
YES! Correct, THANKS for helping me on my review

bbburns21

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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