When considering marginal revenue for the monopolist, which of the following is FALSE?
A) To sell more of a particular product, given the industry demand curve, the monopoly firm must lower the price.
B) An essential point for the monopolist, marginal revenue is always less than price.
C) Marginal revenue is always less than price because price must be reduced on all units to sell more.
D) The more the monopolist wants to sell, the higher the price it has to charge in order to make more profits.

Question

Quizplus · Accepted Answer

This statement is false because the monopolist actually has to lower the price to sell more units. As the monopolist produces more units, it will face a downward-sloping demand curve and therefore will have to lower the price on all units in order to sell more. This means that marginal revenue will always be less than price, as stated in choice B and C.

When Considering Marginal Revenue for the Monopolist, Which of the Following