For a monopoly,a negative marginal revenue implies:
A) the price effect is larger than the quantity effect.
B) total revenues are increasing.
C) that the demand is price elastic.
D) the quantity effect is larger than the price effect.

Question

Quizplus · Accepted Answer

When marginal revenue is negative, it means that the price effect (loss in revenue from lowering the price) is larger than the quantity effect (gain in revenue from selling more units).

For a Monopoly,a Negative Marginal Revenue Implies