Why might a monopolist operate in an inelastic part of the demand curve?

A monopolist may operate in the inelastic part of the demand curve to increase total profit. Inelastic demand implies that consumers are less sensitive to price changes; when the monopolist raises prices, the quantity demanded decreases only slightly. This allows the monopolist to raise prices without significantly reducing sales volume, leading to higher total revenue.

Operating in this region is beneficial because the increase in price outweighs the loss from fewer units sold, resulting in greater profit margins. By taking advantage of inelastic demand, the monopolist can effectively maximize profits, since the additional revenue generated from a price increase is not offset by a proportional decrease in quantity demanded. This strategic positioning enables the monopolist to leverage its market power and optimize economic outcomes.