The diagram presents the marginal cost (MC), marginal revenue (MR), average revenue (AR) and average total cost (ATC) curves for a profit-maximising firm in an oligopolistic market. What is the reason the oligopolist would not want to raise its price above P?
- ADemand is relatively elastic, meaning the firm would see a reduction in total revenue.
- BDemand is relatively elastic, meaning the firm would see an increase in total revenue.
- CDemand is relatively inelastic, meaning the firm would see a reduction in total revenue.
- DDemand is relatively inelastic, meaning the firm would see an increase in total revenue.