Under imperfect competition:
A)demand curve lies below the marginal revenue curve.
B)demand curve lies above the marginal revenue curve.
C)demand curve coincides with the marginal revenue curve.
D)demand curve coincides with the marginal cost curve.
E)demand curve coincides with the average cost curve.

Question

Quizplus · Accepted Answer

Under imperfect competition, the demand curve lies above the marginal revenue curve because firms have some market power and face a downward-sloping demand curve, meaning they must lower the price to sell additional units, causing marginal revenue to be less than the price.

Under Imperfect Competition