The correct answer is: A. When elasticity of demand is highly elastic.
A monopolist is the only seller of a good or service in a market. This means that they have a great deal of market power and can set prices without fear of losing customers to competitors. However, monopolists are not able to charge any price they want. They must still consider the demand for their product.
The demand for a good or service is the relationship between the price of the good or service and the quantity that consumers are willing and able to buy. The elasticity of demand is a measure of how responsive consumers are to changes in price. A good or service with highly elastic demand is one where consumers are very sensitive to changes in price. This means that if the price of the good or service goes up, consumers will buy much less of it. A good or service with less elastic demand is one where consumers are less sensitive to changes in price. This means that if the price of the good or service goes up, consumers will still buy a lot of it.
A monopolist will maximize profit by charging the highest price that consumers are willing and able to pay. However, the monopolist must also consider the elasticity of demand. If the demand for the monopolist’s product is highly elastic, then the monopolist will not be able to charge a very high price. This is because consumers will be very sensitive to changes in price and will buy much less of the product if the price goes up. If the demand for the monopolist’s product is less elastic, then the monopolist will be able to charge a higher price. This is because consumers will be less sensitive to changes in price and will still buy a lot of the product even if the price goes up.
In conclusion, a monopolist may charge higher price to maximize profit under the condition that the elasticity of demand is highly elastic.