Where does the marginal-revenue curve for a monopoly firm start?
(i) at the same point on the vertical axis as the average-revenue curve
(ii) above the demand curve
(iii) below the demand curve
A)(i) only
B)(i) and (ii)
C)(i) and (iii)
D)(iii) only

Question

Quizplus · Accepted Answer

The marginal-revenue curve for a monopoly firm starts at the same point on the vertical axis as the average-revenue curve because the average revenue is the same as the price, and the price starts at the highest point on the demand curve. Marginal revenue does not start above or below the demand curve; it diverges from the demand curve as quantity increases.

Where Does the Marginal-Revenue Curve for a Monopoly Firm Start