monopoly

[kratika]

if a monopolist had no costs the best possible price would be where demand is

1.infinitely elastic
2.relatively elastic
3.unit elastic
4.relatively inelastic

[ritu]

i think it shud be relatively inelastic....since mc is 0 he wud produce at the level where mr hits output axis....at that output he uses the demand curve to find out price....generally it shud fall in the inelastic range in the given case....

[neha.]

i think the answer should be option 3,,,'cause if MC is zero,, MR=0 which means
         p[1+(1+ed)]=0,,, so ed will be -1,,

[anon_econ]

i agree with neha

[neha.]

take p[1+(1/ed)]=0 in place of p[1+(1+ed)]=0,,, there was a typo there

[kratika]

3 is d correct option...thanks :)

[ritu]

m sorry for the wrong anser:(