For a single-price monopoly, marginal revenue is
A)equal to price for the first unit of output.
B)less than price for all units of output after the first unit.
C)greater than price.
D)horizontal.
E)a and b

Question

Quizplus · Accepted Answer

Marginal revenue is equal to the price for the first unit of output because there are no previous units to compare the change in total revenue. For all units of output after the first, marginal revenue is less than the price because to sell more units, the monopoly must lower the price, which affects all units sold, not just the additional unit.

For a Single-Price Monopoly, Marginal Revenue Is