Under which of the following does a monopoly's demand curve become its marginal revenue curve?
A) all types of monopoly
B) only single-price monopoly
C) only perfect price discrimination
D) only price discrimination on the basis of the number of units purchased
E) any monopoly that price discriminates

Question

Quizplus · Accepted Answer

In a perfectly price discriminating monopoly, the firm charges each consumer the maximum they are willing to pay for each unit, effectively capturing the entire area under the demand curve as revenue. This means the demand curve itself becomes the marginal revenue curve, as each additional unit sold increases revenue by exactly the price the consumer is willing to pay for that unit, with no need to lower the price on previous units sold.

Under Which of the Following Does a Monopoly's Demand Curve