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 because selling an additional unit requires lowering the price on all units sold. Average revenue equals price for both competitive and monopoly firms.

Which of the Following Statements Is True? I) When a Competitive