For a profit-maximizing monopolist, A) P MR. B) P

Name: For a profit-maximizing monopolist, A) P > MR. B) P < MR. C) P = MR. D) P is unrelated to MR.
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Question

For a profit-maximizing monopolist,
A) P > MR.
B) P < MR.
C) P = MR.
D) P is unrelated to MR.

Quizplus · Accepted Answer

In a monopolistic market, the price (P) is always greater than marginal revenue (MR) because the monopolist faces a downward-sloping demand curve. This means that to sell additional units, the monopolist must lower the price, which affects the revenue generated from all units sold, not just the additional unit.

For a Profit-Maximizing Monopolist