The Figures Given Below Represent the Revenue Curves of a Monopolist

question 6

Multiple Choice

The figures given below represent the revenue curves of a monopolist. Figure 24.2 TR: Total revenue curve
AR: Average revenue curve
MR: Marginal revenue curve
Refer to Figure 24.2.If the monopolist is selling a quantity between B and E, then to maximize total revenue, the monopolist should:

• A)increase price because it is operating on the elastic portion of the demand curve.
• B)decrease price because it is operating on the elastic portion of the demand curve.
• C)increase price because it is operating on the inelastic portion of the demand curve.
• D)decrease price because it is operating on the inelastic portion of the demand curve.
• E)increase price because it is operating at the point at which price elasticity of demand is greater than 1.

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Definitions:

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