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Question 5. (10 marks) Let D(p) be the demand curve for a monopolist's product. (a) Write down the monopolist's revenue function (b) We know that,
Question 5. (10 marks) Let D(p) be the demand curve for a monopolist's product.
(a) Write down the monopolist's revenue function
(b) We know that, for two functions g(x) and f(x): Elx[g(x)f(x)] = Elx[g(x)] + Elx[f(x)]. Use this to find the elasticity of revenue with respect to price.
(c) Show that, if demand is elastic, increasing price will decrease revenue for the monopolist.
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