Suppose that a monopolist is charging $12 per unit of output.One can infer
A) that marginal revenue is greater than $12.
B) that average revenue is less than $12.
C) that marginal revenue is $12.
D) that marginal revenue is less than $12.
E) nothing from this information.

Question

Quizplus · Accepted Answer

A monopolist faces a downward-sloping demand curve, meaning that in order to sell more units of output, the monopolist must lower the price for all units sold. Therefore, marginal revenue is less than the price charged. In this case, the monopolist charges $12 per unit, so the marginal revenue for selling one more unit is less than $12.

Suppose That a Monopolist Is Charging $12 Per Unit of Output.One