Suppose a certain firm has a monopoly on electricity.To sell the 100th unit of electricity,what must the firm experience
A)less marginal revenue on the 100th unit of electricity than it experienced on the 99th unit
B)more average revenue on the 100th unit of electricity than it experienced on the 99th unit
C)less marginal cost on the 100 units of electricity than it experienced on the first 99 units
D)more marginal revenue on the 100th unit of electricity than it experienced on the 99th unit

Question

Quizplus · Accepted Answer

In a monopoly, marginal revenue decreases as more units are sold due to the downward-sloping demand curve. Thus, the marginal revenue on the 100th unit is less than on the 99th unit.

Suppose a Certain Firm Has a Monopoly on Electricity