Are major-league baseball clubs profit-maximizing monopolies? Some observers of this market contend that baseball club owners want to maximize attendance or revenue. Alexander (2001) said that one test of whether a firm is a profit-maximizing monopoly is to check whether it is operating in the elastic portion of its demand curve, which, according to his analysis, is true. Why is that a relevant test? What would the elasticity be if a baseball club were maximizing revenue?

2. Market Power and Welfare