The monopolist's marginal revenue curve
A) doesn't exist.
B) lies below the demand curve.
C) is identical to the demand curve.
D) lies above the demand curve.

Question

Quizplus · Accepted Answer

The monopolist's marginal revenue curve lies below the demand curve. This is because the monopolist must lower the price on all units in order to sell an additional unit, resulting in a decrease in total revenue, hence creating a downward sloping marginal revenue curve that lies below the demand curve.

The Monopolist's Marginal Revenue Curve