If a monopolist's marginal revenue is less than zero over a range of output,then price elasticity of demand must be:
A) greater than one.
B) equal to one.
C) less than one.
D) equal to zero.

Question

Quizplus · Accepted Answer

When a monopolist's marginal revenue is less than zero, it means that an increase in output leads to a decrease in total revenue. This can only happen when demand is price inelastic, meaning that an increase in price leads to a smaller decrease in quantity demanded. Therefore, the price elasticity of demand must be less than one.

If a Monopolist's Marginal Revenue Is Less Than Zero Over