For a monopolist, price is greater than marginal revenue.

Question

Quizplus · Accepted Answer

This is because the monopolist has market power and can increase the price without losing all their customers. When the monopolist increases the price, the quantity demanded decreases, thus the marginal revenue of the last unit sold is lower than the price. Therefore, the monopolist maximizes profit by producing where marginal revenue equals marginal cost, which is at a lower quantity and higher price than in a competitive market.

For a Monopolist, Price Is Greater Than Marginal Revenue