For a monopoly producing any output level greater than one,the marginal revenue curve:
A)lies below the demand curve.
B)lies above the average revenue curve.
C)is minimized when total revenue is maximized.
D)is the same as the demand curve.

Question

Quizplus · Accepted Answer

For a monopoly producing any output level greater than one, the marginal revenue curve is below the demand curve. This is because monopolists have the power to influence the price they charge for their product. In order to sell more units, they must lower the price, which will reduce the revenue they receive for each additional unit sold. Therefore, the marginal revenue curve will lie below the demand curve, reflecting the fact that each additional unit sold brings in less revenue than the previous unit sold.

For a Monopoly Producing Any Output Level Greater Than One,the