Graphically, the marginal revenue curve of a monopolist
A) will sometimes lie below the demand curve of the monopolist.
B) will always lie below the demand curve of the monopolist.
C) is the same as the demand curve of the monopolist.
D) will equal −1 when the elasticity of demand is unitary.

Question

Quizplus · Accepted Answer

In a monopoly, the marginal revenue curve always lies below the demand curve because the monopolist must lower the price on all units sold to sell an additional unit, causing marginal revenue to be less than the price.

Graphically, the Marginal Revenue Curve of a Monopolist