For a monopolist
A) marginal revenue is less than price.
B) marginal revenue equals price.
C) marginal revenue is greater than price.
D) marginal revenue equals average revenue.

Question

Quizplus · Accepted Answer

For a monopolist, the marginal revenue (the change in revenue from selling one more unit) is less than the price because to sell one more unit, the monopolist must lower the price on all units sold, not just the one additional unit. This means that the price of the additional unit is lower than the average price of all units sold, leading to a lower marginal revenue.

For a Monopolist