After the first unit sold,the marginal revenue a monopolist receives from selling one more unit of a good is less than the price of that unit because of:
A)diminishing marginal returns.
B)increasing marginal cost.
C)a downward-sloping demand curve.
D)declining average fixed cost.

Question

Quizplus · Accepted Answer

A monopolist is the sole producer of a good and has control over the price. The demand curve for a monopolist slopes downward, which means that in order to sell more units, the monopolist must lower the price of the good. As a result, the revenue gained from selling an additional unit will be less than the price of that unit, leading to a downward sloping marginal revenue curve.

After the First Unit Sold,the Marginal Revenue a Monopolist Receives