. Consider a profit-maximising monopolist facing a downward sloping demand curve.

A. Explain intuitively why marginal revenue will be less than the price for this

monopolist. (2 points)

B. Explain intuitively why a profit-maximising monopolist will never produce on

the inelastic portion of the demand curve. (2 points)

C. Show that a revenue-maximising monopolist will produce where the price

elasticity of demand is -1. (4 points)

D. If instead the demand curve was perfectly horizontal, would there be any deadweight loss in this economy? Explain. (2 points)