What happens to a monopolys revenue when it sells more units of its Essay

What happens to a monopolys revenue enhancement when it sells more units of its product - Essay Examplepure monopoly in this world of ontogenesisd consumer awareness and consumer protection, entirely a close example can be utilities such as water, electricity etc. in a country or Microsoft in the personal computer market. Since there is only one provider in the monopoly market, therefore the lease curve of the single provider is the market demand curve. The monopolizer leave behind set his quantity at a level where the incremental revenue earned by selling one unit, i.e. marginal revenue is equal to the marginal cost, i.e. incremental cost of producing one extra unit. The impairment will be set equivalent to the average revenue at that quantity. Lack of competition allows the monopolist to earn an economic profit. This is shown graphically on the next page.When the number of units sold increases the revenue increases primarily because the supplier is the only one in the marke t and there is little option available to the consumers. However, as the determine increases, the elasticity of demand for the product increases (becomes more elastic as shown by the demand curve D) and the demand starts to decline more than proportionately to the change in equipment casualty. If the decline in demand is more than the increase in price, then the sellers revenue would decrease. Given the income distribution in a society, there is a limit to the number of units that can be sold at a high price and if the seller intends to sell more units, then he must lower the price of the