Linear demand curve should always produce

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1. Evaluate the following statements and discuss whether they are true, false or uncertain. Justify your answers.

(i) A monopolist encounters a linear demand curve should always produce at the point where the demand is unit elastic in order to maximise profit.

(ii) Applying the rational spending rule, a consumer consuming two products A and B should always buy more A and less B if the marginal utility of the last unit of A consumed is higher than that of B.

Reference no: EM131185935

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