A nondiscriminating pure monopolist finds that it can sell its 50th unit of output for $50. We can surmise that the marginal
A) cost of the 50th unit is also $50.
B) revenue of the 50th unit is also $50.
C) revenue of the 50th unit is less than $50.
D) revenue of the 50th unit is greater than $50.

Question

Quizplus · Accepted Answer

In a monopoly, the marginal revenue is less than the price because the monopolist must lower the price on all units sold to sell an additional unit. Thus, the marginal revenue of the 50th unit is less than $50.

A Nondiscriminating Pure Monopolist Finds That It Can Sell Its