To Maximize Its Profit, a Monopoly Should Choose a Price

question 49

Multiple Choice

To maximize its profit, a monopoly should choose a price where demand is:

• A) elastic.
• B) inelastic.
• C) unitary elastic.
• D) vertical.

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good or service and the quantity demanded by consumers.

Supply Curve

Graphically represents the relationship between the price of a good and the quantity of that good that suppliers are willing and able to sell.

Quantity

The amount or number of a material or product available or produced.

Price

The expenditure foreseen, necessary, or allocated in trading for something.