At the profit-maximizing quantity of output for a monopolist, average revenue, marginal revenue, and price are all equal.

Question

Quizplus · Accepted Answer

At the profit-maximizing quantity of output for a monopolist, price is greater than marginal revenue. This is because a monopolist faces a downward-sloping demand curve, and to sell additional units, it must lower the price on all units sold. Thus, average revenue (or price) is above marginal revenue at the profit-maximizing output.

At the Profit-Maximizing Quantity of Output for a Monopolist, Average