The Smiling Lizard Company has a monopoly in the sale of iguanas in Florida. When the Smiling Lizard Company sells ten iguanas its marginal revenue is $50. When the Smiling lizard Company sells eleven iguanas its marginal revenue will be
A) less than $50.
B) greater than $50.
C) equal to $50.
D) greater than $50 if demand is elastic and less than $50 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, leading to a marginal revenue less than the price of the last unit sold.

The Smiling Lizard Company Has a Monopoly in the Sale