Question

what can you say about the connection between the price a monopolist chooses to charge and whether or not demand is elastic, unitary, or inelastic at that price?

Answer 1

Answer :

In monopolistic competition not at all like the perfect competition the demand curve isn't perfectly elastic. This is on the grounds that the monopolistic market sellers don't endure the misfortunes regardless of whether they raise the price of the product. The MR curve is descending slanting which additionally expresses that the more can be sold at lower prices.

Assume if there is the presence of the comparative sort of product yet there might be brief distinction in the price because of the product differentiation and thus the demand isn't perfectly elastic. It is elastic.

The connection between marginal revenue and elasticity can be demonstrated as under :

- In the event that demand will in general be elastic, at that point there is a Positive marginal revenue.

- In the event that demand will in general be inelastic, at that point there is a Negative marginal revenue.

- In the event that demand will in general be unit elastic, at - that point there is a Zero marginal revenue.

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