Which of the following statements is true? (i)
When a competitive firm sells an additional unit of output, its revenue increases by an amount less than the price.(ii)
When a monopoly firm sells an additional unit of output, its revenue increases by an amount less than the price.(iii)
Average revenue is the same as price for both competitive and monopoly firms.
A)(ii) only
B)(iii) only
C)(i) and (ii) only
D)(ii) and (iii) only

Question

Quizplus · Accepted Answer

In a monopoly, marginal revenue is less than the price due to the downward-sloping demand curve, making statement (ii) true. Average revenue equals price for both competitive and monopoly firms, making statement (iii) true.

Which of the Following Statements Is True? (I)