When a monopolist increases the amount of output that it produces and sells,what happens to its average revenue and its marginal revenue
A)Both its average revenue and its marginal revenue increase.
B)Its average revenue increases, and its marginal revenue decreases.
C)Its average revenue decreases, and its marginal revenue increases.
D)Both its average revenue and its marginal revenue decrease.

Question

Quizplus · Accepted Answer

In a monopoly, increasing output leads to a decrease in both average revenue and marginal revenue because the monopolist must lower the price to sell additional units, which reduces revenue per unit.

When a Monopolist Increases the Amount of Output That It