Current output of a good is X. If demand is inelastic at X, expenditure would be higher if output was?

Question

a) maximized

b) minimized

c) constant

d) < X

e) > X

Answer 1

d) &lt; X

For downward sloping demand curve inelastic segment is at lowest end, thus to increase total revenue monopolist should increase price till it reaches unitary elasticity. To increase price monopolist will reduce supply by reducing production.

Answer 2

If demand is inelastic at X, then that means output X is below the equilibrium output. So raise the output to the equilibrium point in order to gain max expenditure. Then I guess the answer is e)