For a monopolist, at the profit-maximizing level of output:
A)price is greater than marginal revenue.
B)marginal revenue is greater than average revenue.
C)average revenue is greater than price.
D)price is equal to marginal revenue.

Question

Quizplus · Accepted Answer

For a monopolist, the price is always greater than marginal revenue because they face a downward-sloping demand curve. This means that to sell additional units, they must lower the price not only on the additional units but also on all previous units sold, which causes marginal revenue to be less than the price.

For a Monopolist, at the Profit-Maximizing Level of Output