For a single- price monopolist, marginal revenue is less than price because
A) total revenue always decreases as output increases.
B) the revenue gain from the last unit sold is offset by further gains in price on units not sold at all.
C) the revenue gain from the last unit sold is offset by a revenue loss on the units that previously had been sold at a higher price.
D) the price does not have to be lowered on all previous units sold.

Question

Quizplus · Accepted Answer

For a single-price monopolist, to sell an additional unit, they must lower the price not just for that unit but for all units sold. This means the additional revenue gained from selling one more unit (marginal revenue) is less than the price of that unit because it includes a revenue loss on all the units that were sold at the higher price before the price was lowered.

For a Single- Price Monopolist, Marginal Revenue Is Less Than