For a monopolist, at high price levels, demand tends to be ____________ and the

Question

For a monopolist, at high price levels, demand tends to be ____________ and the price effect is ____________, relative to the output effect.

A.) inelastic; small (B.) inelastic; large (C.) elastic; small (D.)elastic; large (E.)inelastic; insignificant

Similarily, at a given point in time, Herb's Herb Emporium, a monopolist, is producing at a level of output where marginal revenue is greater than marginal cost. Everything else held constant, Herb could increase his firm's profits by _____ the quantity of herbs he produces and _____ the price he charges for them.

A.)decreasing; increasing (B.)increasing; increasing (C.)decreasing; decreasing (D.)increasing; decreasing (E.)not changing; not changing

Any help would be appreciated, thanks!

Explanation / Answer

1.inelastic,insignificant

2.increasing,decreasing

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