Marginal revenue for a monopolist is less than the price it charges for its product.

Question

Quizplus · Accepted Answer

Marginal revenue is the additional revenue obtained from selling one additional unit of the product. Since a monopolist is the sole seller of the product and has the ability to influence the price, it will generally have to lower the price to sell additional units. This means that the marginal revenue earned from selling an additional unit will be less than the price charged for the product. Therefore, marginal revenue for a monopolist is less than the price it charges for its product.

Marginal Revenue for a Monopolist Is Less Than the Price