Marginal revenue of a monopoly
A)lies above the demand curve.
B)equals average revenue.
C)declines as output is increased.
D)increases as output is increased.
E)is the short-run aggregate supply curve.

Question

Quizplus · Accepted Answer

Marginal revenue for a monopoly declines as output is increased because to sell more units, the monopoly must lower the price, which affects the revenue generated from all units sold, not just the additional ones.

Marginal Revenue of a Monopoly