The Rare Bird Company has a monopoly in the sale of macaws in Iowa. When the Rare Bird Company sells three macaws, its marginal revenue is $30. When the Rare Bird Company sells four macaws, its marginal revenue will be
A) less than $30.
B) greater than $30.
C) equal to $30.
D) greater than $30 if demand is elastic and less than $30 if demand is inelastic.

Question

Quizplus · Accepted Answer

In a monopolistic market, the marginal revenue decreases as the quantity sold increases because the monopolist must lower the price to sell additional units.

The Rare Bird Company Has a Monopoly in the Sale