Let's examine the statement just made, "any monopolist (a single firm that is the entire industry, and thus has no competitors) that finds itself on the inelastic portion of its demand curve should increase price."

   We were clear that revenue and profit aren't the same, and yet we're saying that a monopolist will always benefit from increasing price if demand is inelastic because revenue will increase. How can we be sure increasing revenue in this way will increase profit if demand is inelastic?

   Keep in mind that we're suggesting only that a monopolist raise price if demand is inelastic, thereby increasing revenue. The reason we can be sure this is profit increasing is that revenue is increasing while quantity is falling. If quantity is falling, the production costs must be falling. It is virtually impossible that total costs fall as production increases. Thus, if demand is inelastic and if competitive conditions allow it (which they do, if the firm is a monopolist), firms will increase profits by increasing price.

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