Which of the following is true of the average and marginal revenue for a monopoly ﬁrm?
A) The monopolist's marginal revenue curve is the same as the average revenue curve.
B) The monopolist's marginal revenue bears a constant relationship with average revenue.
C) The monopolist's marginal revenue falls at a faster rate than average revenue.
D) Marginal revenue is greater than average revenue for the monopolist.

Question

Quizplus · Accepted Answer

For a monopolist, the marginal revenue curve lies below the average revenue (or demand) curve because to sell additional units, the monopolist must lower the price not just for the additional units but for all units sold. This causes the marginal revenue to fall at a faster rate than the average revenue.

Which of the Following Is True of the Average and Marginal