Successive downward movements along the demand curve for the product of a monopolist always generate successive
A) increases in the monopolist's marginal revenue.
B) increases in the monopolist's average total costs.
C) decreases in the additional per-unit costs incurred by the monopolist.
D) decreases in the additional per-unit revenues earned by the monopolist.

Question

Quizplus · Accepted Answer

Successive downward movements along the demand curve for a monopolist's product result in lower prices for each unit sold. Therefore, the additional per-unit revenue earned by the monopolist will decrease with each successive movement along the demand curve. This is because the monopolist must lower the price for all units sold, not just the additional unit. Therefore, choice D is correct. A and C are incorrect because marginal revenue and per-unit costs are not affected by movements along the demand curve. B is incorrect because successive movements along the demand curve do not necessarily affect the monopolist's average total costs.

Successive Downward Movements Along the Demand Curve for the Product