For a single- price monopolist, as output increases, total revenue
A) increases continually.
B) initially increases and then decreases.
C) decreases continually.
D) initially decreases and then increases.

Question

Quizplus · Accepted Answer

A single-price monopolist experiences an initial increase in total revenue as output increases due to the sale of more units. However, to sell more units, the monopolist must lower the price, which eventually leads to a decrease in total revenue as the price cuts outweigh the benefits of selling additional units.

For a Single- Price Monopolist, as Output Increases, Total Revenue