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1. For a linear demand curve given as q = a – bp when the monopolist operates in the inelastic region of the demand curve, it can increase total revenue, r(q) raising price.

   What is a linear demand curve?

   A linear demand curve is a straight line that depicts the relationship between a product’s or service’s demand and its price. Everyone understands that sales are proportional to price: the higher the price, the fewer items you can expect to sell.

   When the price of a good or service changes, its quantity remains constant. Inelastic demand means that when the price of a good or service rises, consumers’ purchasing habits remain relatively unchanged, and when the price falls, consumers’ purchasing habits also remain relatively unchanged.

   What is inelastic demand?

   Demand inelasticity means that demand remains constant despite changes in economic factors. Products and services with many alternatives typically have elastic demand, whereas products and services with few alternatives are typically inelastic.

   When the monopolist operates in the inelastic region of the demand curve, r(q) raising price, for a linear demand curve given as q = a – bp.

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