Exhibit 8-1 Monopolist's demand curve

-Which of the following points in Exhibit 8-1 would not lie on the marginal revenue curve corresponding to the monopolist's straight-line demand curve?
A) A.
B) B.
C) C.
D) C and B.

Question

Exhibit 8-1 Monopolist's demand curve
 
-Which of the following points in Exhibit 8-1 would not lie on the marginal revenue curve corresponding to the monopolist's straight-line demand curve?
A) A. 
B) B. 
C) C. 
D) C and B.

Quizplus · Accepted Answer

Point C is the point where the demand curve intersects with the y-axis, which means the price is the highest at this point. Therefore, the slope of the marginal revenue curve at this point is going to be zero since any price increase will result in zero demand. Point B is the midpoint of the demand curve, and the slope of the marginal revenue curve at this point is going to be negative. Therefore, points B and C will not lie on the marginal revenue curve corresponding to the monopolist's straight-line demand curve.

Exhibit 8-1 Monopolist's Demand Curve