If a monopoly is operating along the portion of its demand curve where marginal revenue is positive, its
A) total revenue is zero.
B) total revenue decreases when price decreases.
C) total revenue increases when price decreases.
D) total revenue remains the same when price decreases.

Question

Quizplus · Accepted Answer

When a monopoly operates along the portion of its demand curve where marginal revenue (MR) is positive, reducing the price to sell one more unit will increase total revenue. This is because the additional revenue from selling the extra unit (marginal revenue) is positive, outweighing the loss from lowering the price on all units sold.

If a Monopoly Is Operating Along the Portion of Its