Why does a monopoly always operate on the elastic part

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(1) Why does a monopoly always operate on the elastic part of the demand curve?

(2) People are always complaining about Facebook: It changed the way its news feed works, the privacy settings are awful, there are too many game notifications, and so on. Recognizing dissatisfaction with Facebook, Google tried three times to enter the social networking market, first with Buzz, then with Wave, and now with Google Plus. Users say that the Google Plus platform is far superior to Facebook's, yet Google Plus appears to be failing. Explain why consumers might reject a superior product for an inferior one in a market like this.

(3) Indicate whether the following is true or false, and explain your answer: It seems strange to the casual observer that bestselling novels sell for the same price as novels that are of much lesser quality (and much lower sales volume). Clearly, the publisher, who has a monopoly on the rights to such books, must not be accounting for the strength of demand for the books in question, and therefore is failing to maximize profit.

Reference no: EM132926999

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