As a monopolist increases its output,it finds that its total revenue at first increases,and that after some output level is reached,its total revenue begins to decrease.

Question

Quizplus · Accepted Answer

This is known as the law of diminishing marginal revenue, which occurs when the marginal revenue of producing an additional unit of output decreases. As a result, total revenue will eventually reach a peak and then begin to decrease as the monopolist continues to increase output beyond that point.

As a Monopolist Increases Its Output,it Finds That Its Total