The price changes that would be beneficial to the monopolist, given the graphs and based on the price and output effect, would be Price Change A and Price Change D.
What is a monopolist ?
Companies can become monopolies by vertically integrating their operations to control the entire supply chain from manufacturing to sales, or by acquiring rival businesses to become the only producer.
The price change that would benefit the monopolist the most, based on the price effect and output effect, is the one that would lead to a higher overall revenue.
The total revenue in Price Change A is before the change is:
= 70 x 30
= $ 210
The total revenue after is :
= 60 x 40
= $ 240
This is beneficial.
The total revenue in Price Change D is before the change is:
= 40 x 6
= $ 240
The total revenue in Price Change D is after the change is:
= 50 x 5
= $ 250
Price change D is also beneficial.
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