Asked by Tatum Sobota on May 16, 2024

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A monopolist with a linear demand curve will:

A) not produce in the inelastic portion of its demand curve.
B) produce regardless of elasticity,since it is a monopolist.
C) not produce in the elastic portion of its demand curve.
D) produce only at the unit price-elastic portion of its demand curve.

Linear Demand Curve

A linear demand curve depicts a direct, inverse relationship between the price of a product and the quantity demanded, represented graphically as a straight line.

Inelastic Portion

A segment of the demand curve where consumers are less sensitive to price changes, implying that the quantity demanded changes only slightly in response to large changes in price.

Elastic Portion

The segment of a demand or supply curve where a change in price leads to a more than proportional change in quantity demanded or supplied.

  • Comprehend the relationship between demand elasticity and monopolistic production decisions.
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Sofia SanchezMay 22, 2024
Final Answer :
A
Explanation :
A monopolist with a linear demand curve will produce only in the elastic portion of its demand curve as producing in the inelastic portion would not result in an increase in revenue due to the low price elasticity of demand. Producing in the unit price-elastic portion would result in the optimum level of production as any change in price would result in an equal percentage change in quantity demanded, maximizing revenue for the monopolist.