Question

For a monopolist, average revenue is Equal to marginal revenue at all output levels Greater than...

  1. For a monopolist, average revenue is
    1. Equal to marginal revenue at all output levels
    2. Greater than price at all output levels
    3. Less than price at all output levels
    4. Represented by a horizontal curve at all output levels
    5. More than marginal revenue at all output levels
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Answer #1

The monopoly firm is a market structure where there is only single seller in the market, so the firm has got marke power. The monopoly firm can charge whatever price he wants but not the output. If the firm want to increase the output sold , the firm need to decrease the price. Due to this, the marginal revenue for the firm will be always less than average revenue. The average revenue curve is a downward sloping line, and the marginal revenue curve lies below the average revenue curve.

Ans: e). More than marginal revenue at all output levels.

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