A single-price monopolist sets its price for good X at $75 and is selling more than one unit of good X. Which of the following must be true?
A)The average cost of that unit must be $75.
B)The marginal cost of that unit must be $75.
C)The marginal revenue of that unit must be $75.
D)The marginal revenue of that unit must be less than $75.

Question

Quizplus · Accepted Answer

For a monopolist, the marginal revenue is always less than the price due to the downward-sloping demand curve. Selling an additional unit requires lowering the price on all units sold, which makes the marginal revenue less than the price.

A Single-Price Monopolist Sets Its Price for Good X at $75