For a monopoly producing at any output level greater than one, the marginal revenue curve:
A)is minimized when total revenue is maximized.
B)lies above the average revenue curve.
C)lies below the demand curve.
D)is the same as the demand curve.

Question

Quizplus · Accepted Answer

Marginal revenue for a monopoly is always less than the price at which the additional unit is sold because to sell more units, the monopoly must lower the price on all units sold. This means the marginal revenue curve lies below the demand curve, which is also the average revenue curve for a monopoly.

For a Monopoly Producing at Any Output Level Greater Than