The marginal revenue for a single-price monopoly with a downward-sloping demand curve
A) is less than the price.
B) is greater than the price.
C) is equal to the price.
D) might be more than, less than, or equal to the price, depending on whether the slope of the demand curve exceeds 1.0 in magnitude.
E) might be more than, less than, or equal to the price, depending on whether the price elasticity of demand exceeds 1.0 in magnitude.

Question

Quizplus · Accepted Answer

The marginal revenue for a single-price monopoly with a downward-sloping demand curve is always less than the price because the monopoly must lower the price on all units sold in order to sell additional units due to the downward-sloping demand curve. As a result, the additional revenue earned from selling an additional unit is less than the price of that unit.

The Marginal Revenue for a Single-Price Monopoly with a Downward-Sloping