For a monopolist, marginal revenue for all units greater than one is:
A)always equal to price.
B)never less than price.
C)always less than price.
D)minimized at the profit-maximizing price.

Question

Quizplus · Accepted Answer

For a monopolist, marginal revenue is always less than the price for all units greater than one because they face a downward-sloping demand curve. To sell additional units, they must lower the price, which means the additional revenue gained from selling one more unit (marginal revenue) is less than the price at which they sell that unit.

For a Monopolist, Marginal Revenue for All Units Greater Than