If a Profit-Maximizing Monopolist Is Currently Charging a Price on the Inelastic

question 118

Multiple Choice

If a profit-maximizing monopolist is currently charging a price on the inelastic portion of its demand curve, what action should it take to maximize profits?

• A) It should reduce both output and price.
• B) It should raise the price and decrease output.
• C) It should raise the price and hold output constant.
• D) It should lower the price and increase output.

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