« previous next »

Author Question: What portion of the demand curve will profit-maximizing monopolists choose to operate on: the ... (Read 92 times)

P68T

  • Hero Member
  • *****
  • Posts: 509
on: Jun 30, 2018
What portion of the demand curve will profit-maximizing monopolists choose to operate on: the inelastic portion or elastic portion? Why?

Question 2

Suppose the official gold value of the Brazilian real changes from 457 reals per ounce to 528 reals per ounce. We can then say that:
 a. the Brazilian real has been devalued.
  b. the Brazilian economy is expected to experience rapid inflation.
  c. gold has been devalued.
  d. the Brazilian real has appreciated in value.
  e. gold is now cheaper to purchase in Brazil than it was before.


firehawk60

  • Sr. Member
  • ****
  • Posts: 315
Reply #1 on: Jun 30, 2018
Answer to Question 1

When demand is inelastic, quantity demanded changes by a smaller percentage than does the price. As a result, a firm could increase total revenue simply by reducing output and raising price. At the same time, reducing output reduces total production costs. If total revenue rises and total costs fall, profit increases. Therefore, a profit-maximizing monopolist should reduce output and increase price until it is no longer operating along the inelastic portion of the demand curve. Rather, a profit-maximizing monopolist will always operate along the elastic portion of the demand curve.

Answer to Question 2

a


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

P68T

  • Hero Member
  • *****
  • Posts: 509
Reply #2 on: Jun 30, 2018
Thank you


firehawk60

  • Sr. Member
  • ****
  • Posts: 315
Reply #3 on: Jun 30, 2018
No problemo


« previous next »
 

Did you know?

Women are 50% to 75% more likely than men to experience an adverse drug reaction.

Did you know?

There are actually 60 minerals, 16 vitamins, 12 essential amino acids, and three essential fatty acids that your body needs every day.

Did you know?

In inpatient settings, adverse drug events account for an estimated one in three of all hospital adverse events. They affect approximately 2 million hospital stays every year, and prolong hospital stays by between one and five days.

Did you know?

Congestive heart failure is a serious disorder that carries a reduced life expectancy. Heart failure is usually a chronic illness, and it may worsen with infection or other physical stressors.

Did you know?

Less than one of every three adults with high LDL cholesterol has the condition under control. Only 48.1% with the condition are being treated for it.

Titration Curve Titration Curve
Human photopic (cone) and scotopic (rod) spectral sensitivity curves. The peak of each curve has ... Human photopic (cone) and scotopic (rod) spectral sensitivity curves. The peak of each curve has ...
A Receiver-Operating-Characteristic (ROC) Curve A Receiver-Operating-Characteristic (ROC) Curve
How to find the equation of a cosine curve How to find the equation of a cosine curve
The growing demand for electrical power, carbon sequestration and storage must be a priority The growing demand for electrical power, carbon sequestration and storage must be a priority
The slope of the curve y = ax^3 - bx^2 + cx - 3 at x = 2 is 5. If the point of inflection of the cur The slope of the curve y = ax^3 - bx^2 + cx - 3 at x = 2 is 5. If the point of inflection of the cur
Video: Mendel's Principles of Inheritance (Father of Genetics)

For a complete list of videos, visit our video library