contestada

A nondiscriminating monopolist:

1 will never produce in the output range where marginal revenue is positive.

2 will never produce in the output range where demand is inelastic.

3 will never produce in the output range where demand is elastic.

4 may produce where demand is either elastic or inelastic, depending on the level of production costs

Respuesta :

bharathparasad577

Monopolists do not prefer to produce in the when the demand for a good produced by them is inelastic. Option B is the correct answer.

  • It is common to observe that monopolists, avoid engaging production when the demand for their product becomes inelastic.
  • In order to understand this situation, it is important to address the meaning of inelastic demand.
  • The term 'inelastic demand' refers to a situation where the demand for a product does not increase/decrease (change) when there is an increase/decrease (change) in its price.
  • This does not lead to profits for a monopolist.
  • It is because, a firm will be able to secure profits by producing lower amounts of goods for a higher price when the demand is elastic.
  • Hence, when the demand is inelastic, the increase in the quantity will be sold at the previous standard price, leading to a fall in terms of the total revenue.

Therefore, it is clear that a monopolist will not produce when the demand for a good is inelastic.

Learn more about Demand Elasticity here:

https://brainly.com/question/5078326

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