Suppose a monopolist faces the following demand curve. If you were to draw the monopolist's marginal revenue curve, it would:
A)lie on top of the demand curve.
B)intersect the vertical axis at $35.
C)intersect the horizontal axis at 35.
D)have a slope equal to the reciprocal of the slope of the demand curve.

Question

Suppose a monopolist faces the following demand curve.  If you were to draw the monopolist's marginal revenue curve, it would:
A)lie on top of the demand curve. 
B)intersect the vertical axis at $35. 
C)intersect the horizontal axis at 35. 
D)have a slope equal to the reciprocal of the slope of the demand curve.

Quizplus · Accepted Answer

For any straight-line demand curve, the corresponding marginal revenue curve will have twice the slope of the demand curve and the same vertical intercept as the demand curve. As a result, the horizontal intercept of the marginal revenue curve will be half the horizontal intercept of the demand curve.

Suppose a Monopolist Faces the Following Demand Curve