If a monopolist must charge the same price to all customers, then
A) MR will be equal to the price.
B) MR will be greater than the price.
C) MR will be less than the price.
D) MR must be less than MC.

Question

Quizplus · Accepted Answer

Marginal revenue (MR) for a monopolist charging a single price for all units sold will be less than the price because to sell an additional unit, the monopolist must lower the price on all units sold, not just the additional unit. This causes the additional revenue gained from selling one more unit (MR) to be less than the price at which that unit is sold.

If a Monopolist Must Charge the Same Price to All