Which of the following best explains why marginal revenue for a monopolist is less than the sales price?
A) To sell more units, the monopolist must reduce price on all units sold.
B) As the monopolist expands output, the average total cost of production declines.
C) The monopolist charges each consumer the highest possible price.
D) When a firm has a monopoly, consumers have no choice other than to pay the price set by the monopolist.

Question

Quizplus · Accepted Answer

A monopolist must reduce the price on all units sold in order to sell more units, which in turn reduces their marginal revenue.

Which of the Following Best Explains Why Marginal Revenue for a Monopolist