For a monopolist, marginal revenue is always
A) greater than price.
B) equal to price.
C) equal to zero.
D) less than price.

Question

Quizplus · Accepted Answer

Marginal revenue is always less than price for a monopolist. This is because a monopolist is the sole producer in the market and thus, to sell one more unit of output, it must lower the price for all units sold. As a result, the marginal revenue curve is always below the demand curve, and the monopolist must lower the price of all units sold to capture additional unit sales, resulting in marginal revenue being less than price.

For a Monopolist, Marginal Revenue Is Always