Question
. A monopoly would be expected to face an inelastic demand, as the product they sell has no direct substitutes.Yet, if the monopolist produces where
. A monopoly would be expected to face an inelastic demand, as the product they sell has no direct substitutes.Yet, if the monopolist produces where MR=MC, MR must be positive, and demand must therefore be elastic.
Can you solve this conundrum? Please use a diagram to illustrate and fully explain your answer
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Econometric Analysis
Authors: William H. Greene
5th Edition
130661899, 978-0130661890
