Final answer:
A profit-maximizing monopoly produces where marginal revenue equals marginal cost, which typically occurs in the elastic range of its demand curve to maximize revenue. The correct option is B.
Step-by-step explanation:
The question pertains to the production decisions of a firm under a monopoly. Under pure monopoly, a profit-maximizing firm will produce in the range where marginal revenue (MR) is equal to marginal cost (MC). This rule is fundamental to profit maximization for any firm, not just in a monopoly. In the specific context of a monopoly, the production will typically occur where the demand curve is elastic, because when demand is inelastic, increasing the price will lead to a disproportionate decrease in quantity demanded, which reduces total revenue.
According to economic theory, the profit-maximizing quantity will occur exactly where MR equals MC, which can be graphically identified where the MR and MC curves intersect. This intersection determines the quantity to produce, and then the price is determined by looking up to the corresponding point on the demand curve. However, the question asks about the range on the demand curve, and the firm will avoid producing in the inelastic range because that would mean increasing output would not increase revenue proportionally. So, the correct answer is that a profit-maximizing monopoly will produce in the elastic range of its demand curve.