Which of the following statements is false?
A)A price searcher must lower price to sell an additional unit of its product.
B)For a price searcher, price equals marginal revenue for all units except the first.
C)For a price searcher, price is greater than marginal revenue for all units except the first.
D)A price searcher, like a price taker, produces that quantity of output for which marginal revenue equals marginal cost.

Question

Quizplus · Accepted Answer

B is false because for a price searcher (or price maker), the price is always above marginal revenue for all units sold due to the downward-sloping demand curve they face. This means that to sell additional units, they must lower the price, which decreases marginal revenue for all subsequent units, not just the first.

Which of the Following Statements Is False