Question
Explain and illustrate using a diagram why a monopolist would never produce in the inelastic range of the demand curve. (3 marks for explanation, 3 marks for diagram)
In each of the following cases, state whether the monopolist would increase or decrease output:
Marginal revenue exceeds marginal cost at the output produced; (2 marks)
(ii) Marginal cost exceeds marginal revenue at the output produced. (2 marks)
