How can a monopolist identify the profit-maximizing level of output if it knows its total revenue and total cost curves? O A. The profit-maximizing level of output can be determined by comparing marginal revenue and total cost. B. Cannot be determined from this information OC. The profit-maximizing level of output will be where there is the greatest difference between total revenue and total cost. O D. The profit-maximizing level of output will be where there is the smallest difference between total revenue and total cost.

Why must a monopolist always price in the elastic part of the demand curve if she sets an optimal price?Hint: Marginal Revenue equals Marginal Cost at the What is the relationship between elasticityand Marginal Revenue = 0 at unit elasticity?

One of these four answers best represents the condition that generates a natural monopoly. Which one? OA single firm controls an industry because there are very few customers in the industry. The government prohibits entry into an industry. O The firm takes anti-competitive actions to keep other firms out. O Economies of scale are large relative to quantity demanded in a market

Consider the relationship between monopoly pricingand price elasticity of demand.a. Explain \\•hy a monopolist will never produce aquantity a t which the demand curve is inelastic.(Hint: If demand is inelastic and the firm raisesits price, what happens to total revenue and totalcosts?)b. Draw a diagram for a monopolist,. preciselylabeling the portion of the demand curve thatis inelastic. (Hint: The answer is related to themarginal-revenue curve.)c. On your diagram, show the quantity and pricethat maximize total revenue.