For a monopolist,when does marginal revenue exceed average revenue?
A)Never
B)When output is less than the profit-maximizing level of output
C)When output is greater than the profit-maximizing level of output
D)For all levels of output greater than zero.

Question

Quizplus · Accepted Answer

For a monopolist, marginal revenue is always less than average revenue because the monopolist must lower the price on all units sold to sell additional units, leading to a decrease in marginal revenue.

For a Monopolist,when Does Marginal Revenue Exceed Average Revenue