For a single-price monopoly,price is
A) equal to marginal revenue.
B) greater than marginal revenue.
C) less than marginal revenue because the firm must lower its price in order to sell another unit of output.
D) less than marginal revenue because the firm cannot increase its total revenue when the demand curve is downward sloping.
E) equal to zero because the firm is not a price taker.

Question

Quizplus · Accepted Answer

In a single-price monopoly, the price is greater than marginal revenue because to sell an additional unit, the monopolist must lower the price on all units sold, which means the additional revenue gained from selling one more unit (marginal revenue) is less than the price at which the unit is sold.

For a Single-Price Monopoly,price Is