Which of the following statements is true? (i) When a competitive firm sells an additional unit of output,its revenue increases by an amount less than the price.
(ii) When a monopoly firm sells an additional unit of output,its revenue increases by an amount less than the price.
(iii) Average revenue is the same as price for both competitive and monopoly firms.
A)(ii) only
B)(iii) only
C)(i) and (ii)
D)(ii) and (iii)

Question

Which of the following statements is true? (i)	When a competitive firm sells an additional unit of output,its revenue increases by an amount less than the price.
(ii)	When a monopoly firm sells an additional unit of output,its revenue increases by an amount less than the price.
(iii)	Average revenue is the same as price for both competitive and monopoly firms.
A)(ii) only
B)(iii) only
C)(i) and (ii)
D)(ii) and (iii)

Quizplus · Accepted Answer

In a monopoly, marginal revenue is less than the price due to the downward-sloping demand curve. Average revenue equals price for both competitive and monopoly firms.

Which of the Following Statements Is True? (I) When a Competitive