Which of the following statements describes how a monopolist's revenue curves compare to those of a perfectly competitive firm?
A)The monopolist's marginal revenue curve is downward sloping, while the perfectly competitive firm's is flat.
B)The monopolist's average revenue curve is not equal to price, as it is for a perfectly competitive firm.
C)The monopolist's marginal revenue curve is flat, while the perfectly competitive firm's is downward sloping.
D)The monopolist's total revenue curve is linear, while the perfectly competitive firm's is convex.

Question

Quizplus · Accepted Answer

A monopolist's marginal revenue curve is downward sloping because they face a downward sloping demand curve and must lower the price to sell additional units, unlike a perfectly competitive firm, which is a price taker and faces a flat demand curve at the market price, making its marginal revenue curve flat as well.

Which of the Following Statements Describes How a Monopolist's Revenue