Monopoly pricing and elasticity

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Reference no: EM1311200

Give brief answers to each of the following:

(a) "Since a monopolist is the only supplier of a well- defined product, there is no limit to the price it may charge." Is this statement true or false?

(b) Explain why a monopolist will never set a price (and produce the corresponding output) at which the demand is price-inelastic.
(c) "The ultimate monopoly product would be one whose cross elasticity of demand, with respect to any and all other products, was zero." Comment.
(d) "The reason movie theaters charge youngsters and oldsters less than the rest of us is because theater owners want to help these two low-income groups."

Reference no: EM1311200

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