After the first unit, a monopolist's marginal revenue is less than the price it charges because to sell an additional unit it needs to lower its price.

Question

Quizplus · Accepted Answer

A monopolist must lower the price on all units sold to sell an additional unit, which means the additional revenue gained from selling one more unit (marginal revenue) is less than the price of that unit due to the price reduction applied to all units sold.

After the First Unit, a Monopolist's Marginal Revenue Is Less