Because a monopolist must _____ price to sell additional output, its marginal revenue is _____ than the price.

Question

Quizplus · Accepted Answer

Because a monopolist faces a downward-sloping demand curve, to sell more output, it must lower the price. This results in the marginal revenue being lower than the price, as each additional unit sold at a lower price also decreases the revenue received from units that could have been sold at a higher price.

Because a Monopolist Must _____ Price to Sell Additional Output