« previous next »

Author Question: What portion of the demand curve will profit-maximizing monopolists choose to operate on: the ... (Read 88 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?

The people with the highest levels of LDL are Mexican American males and non-Hispanic black females.

Did you know?

The average office desk has 400 times more bacteria on it than a toilet.

Did you know?

Amoebae are the simplest type of protozoans, and are characterized by a feeding and dividing trophozoite stage that moves by temporary extensions called pseudopodia or false feet.

Did you know?

People with alcoholism are at a much greater risk of malnutrition than are other people and usually exhibit low levels of most vitamins (especially folic acid). This is because alcohol often takes the place of 50% of their daily intake of calories, with little nutritional value contained in it.

Did you know?

Though methadone is often used to treat dependency on other opioids, the drug itself can be abused. Crushing or snorting methadone can achieve the opiate "rush" desired by addicts. Improper use such as these can lead to a dangerous dependency on methadone. This drug now accounts for nearly one-third of opioid-related deaths.

The Light Curve of a Nova The Light Curve of a Nova
The physician and medical assistant will often work together to choose appropriate educational ... The physician and medical assistant will often work together to choose appropriate educational ...
Using child-sized dishes at mealtimes can help caregivers monitor portion sizes Using child-sized dishes at mealtimes can help caregivers monitor portion sizes
Construct a Lorenz curve that shows income distribution in this society. Construct a Lorenz curve that shows income distribution in this society.
Suppose a country imports televisions. The country's supply and demand curves are shown in ... Suppose a country imports televisions. The country's supply and demand curves are shown in ...
Portion of plasmid pV-GMGT04 used to create Roundup-Ready soybeans Portion of plasmid pV-GMGT04 used to create Roundup-Ready soybeans
Video: Exercise and cardiac output

For a complete list of videos, visit our video library