Which of the following statements is true?
A)The monopolist can sell all it can produce at the market price.
B)The marginal revenue curve of the single-price monopolist lies above its demand curve.
C)The marginal revenue curve of the single-price monopolist is the same as its demand curve.
D)The marginal revenue curve of the single-price monopolist lies below its demand curve.

Question

Quizplus · Accepted Answer

The marginal revenue curve for a single-price monopolist lies below its demand curve because, to sell additional units, the monopolist must lower the price on all units sold, which means the additional revenue gained from selling one more unit (marginal revenue) is less than the price at which the unit is sold.

Which of the Following Statements Is True