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

Question

Quizplus · Accepted Answer

For a monopoly, the average revenue curve is the same as the demand curve, and because the marginal revenue curve takes into account the effect of output on price, it always lies below the average revenue (demand) curve for any output level greater than one.

For a Monopoly Producing at Any Output Level Greater Than