contestada

What is the shape of the monopolist’s marginal revenue curve?
a. a downward-sloping line that lies below the demand curve
b. a horizontal line that lies below the demand curve
c. a downward-sloping line that is identical to the demand curve
d. a horizontal line that is identical to the demand curve

Respuesta :

Answer:

(b) A horizontal line that lies below the demand curve

Explanation:

  • Marginal revenue of a monopolist is in every case less or equivalent to the cost of the good.
  • In the event that the monopolist needs to sell extra units of output he must diminish the cost.
  • This diminish the marginal revenue earned by the monopolist.
  • Since for each extra output he sells, he is compelled to decrease the cost to a similar amount
  • So the monopolists marginal revenue income curve is descending sloping

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