Question

In: Economics

Marginal revenue is not equal to price for a monopolist because: Multiple Choice a. the monopolist's...

Marginal revenue is not equal to price for a monopolist because:

Multiple Choice

a. the monopolist's demand curve is below its marginal revenue curve.

b. total revenue increases as output increases.

c. the monopolist sets price equal to marginal cost.

d. the monopolist must lower the price of all units in order to sell more.

Solutions

Expert Solution

option d

the monopolist must lower the price of all units in order to sell more

Marginal revenue is a change in the total revenue and for a monopolist, the demand curve is downward sloping as the monopolist must lower the price of all units in order to sell more so the MR curve is double sloped than the demand curve.

Rahul Sunny answered 2 years ago
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