Module Six Quiz X 7 . Monopoly and Price Elasticity Consider the relationship between monopoly pricing and the price elasticity of demand. If demand is inelastic and a monopolist raises its price, total revenue would and total cost would . Therefore, a monopolist will produce a quantity at which the demand curve is inelastic. Use the purple segment (diamond symbols) to indicate the portion of the demand curve that is inelastic. (Hint: The answer is related to the marginal- revenue (MR) curve.) Then use the black point (plus symbol) to show the quantity and price that maximizes total revenue (TR). 10 Demand Inelastic Demand .+ Max TR Price AbbJONWA Marginal Revenue -5 2 3 5 6 7 9 10 Quantity8 . Monopolistic Competition 1. Graphical Picture 2. Profit Max 3. Welfare Effects STEP: 1 of 3 Sparkle is one firm of many in the market for toothpaste, which is in long-run equilibrium. Indicate which of the following graphs accurately reflects Sparkle's demand curve, marginal-revenue (MR) curve, average-total-cost (ATC) curve, and marginal-cost (MC) curve. (?) A B Demand Demand Price, Cost, Revenue ATC Price, Cost, Revenue ATC MC MC MR MR Quantity of Sparkle Toothpaste Quantity of Sparkle Toothpaste