JAMB - Economics (2019 - No. 45)
Whether a monopolist is able to increase his revenue by restricting his output depends on the shape of the_________
marginal product
marginal cost curve
demand curve
average cost curve
Explicació
A monopolist can either decide his output or the price at which he will sell, but not both. A monopolist must consider elasticity of demand, since his aim is to produce the output that will yield him maximum profit.
If the demand curve is elastic, he will decrease his price and if it is inelastic, he will increase his price in order to earn revenue.
If the demand curve is elastic, he will decrease his price and if it is inelastic, he will increase his price in order to earn revenue.