For a monopolist, marginal revenue ________ for all units of output except the first unit.
A) is greater than the price of output
B) is less than the price of output
C) is equal to the price of output
D) may be either greater than or less than the price of output

Question

Quizplus · Accepted Answer

A monopolist faces a downward sloping demand curve, therefore in order to increase output, it needs to lower the price of its product, resulting in a decrease in marginal revenue. The only exception is the first unit, where marginal revenue is equal to the price of output.

For a Monopolist, Marginal Revenue ________ for All Units of Output