A single-price monopoly has a marginal revenue curve that is
A) horizontal and equal to price.
B) downward sloping and lies below the demand curve.
C) upward sloping and is the same as its supply curve.
D) downward sloping and lies above the demand curve.
E) vertical at the profit-maximizing quantity.

Question

Quizplus · Accepted Answer

A single-price monopoly's marginal revenue curve is downward sloping and lies below the demand curve because, to sell additional units, the monopoly must lower the price, which applies to all units sold, thus reducing the marginal revenue below the price.

A Single-Price Monopoly Has a Marginal Revenue Curve That Is