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Price theory suggests that a profit-maximizing monopoly firm will never price its output in the inelastic range of the demand curve. Graphically explain why theory
Price theory suggests that a profit-maximizing monopoly firm will never price its output in the inelastic range of the demand curve. Graphically explain why theory predicts this, and then discuss whether the logic holds for sports teams. In other words, are there any circumstances under which a monopolistic sports franchise would choose to price its tickets in the inelastic range of the market demand curve it faces?
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