If a monopolist faces a straight-line negatively sloped demand curve, the price of the units it sells is always:
A) greater than the average revenue.
B) equal to marginal revenue.
C) greater than marginal revenue.
D) less than the average revenue.

Question

Quizplus · Accepted Answer

In a monopoly, the demand curve is the same as the average revenue curve, and marginal revenue is less than average revenue because the monopolist must lower the price to sell additional units.

If a Monopolist Faces a Straight-Line Negatively Sloped Demand Curve