The following figure shows the demand curve and the marginal revenue curve of a monopolist.On the horizontal axis,OG = GF.
Figure 11-5
-Refer to Figure 11-5.A fall in price will decrease total revenue _____.
A)between the points E and F
B)between the points E and A
C)between the points A and F
D)at point G

Question

The following figure shows the demand curve and the marginal revenue curve of a monopolist.On the horizontal axis,OG = GF.
Figure 11-5 
-Refer to Figure 11-5.A fall in price will decrease total revenue _____.
A)between the points E and F 
B)between the points E and A 
C)between the points A and F 
D)at point G

Quizplus · Accepted Answer

According to the graph, the monopolist is currently maximizing total revenue at point A, where the demand curve intersects the marginal revenue curve. Therefore, a fall in price would lead to a decrease in total revenue. However, the decrease in total revenue would only occur between the points A and F, as below point F the marginal revenue curve becomes negative and any decrease in price would lead to a decrease in total revenue. Thus, the correct choice is C.

The Following Figure Shows the Demand Curve and the Marginal