The Inverse Elasticity Pricing Rule Tells Us the Monopolist's Optimal

Multiple Choice

The inverse elasticity pricing rule tells us the monopolist's optimal mark-up of price over marginal cost. In general,:

A) the more price elastic the monopolist's demand, the smaller the mark-up will be.
B) the less price elastic the monopolist's demand, the smaller the mark-up will be.
C) price equals marginal revenue for the monopolist.
D) marginal revenue equals average revenue for the monopolist.