Question

At a point on a demand curve where demand is inelastic, a monopolist’s marginal revenue is...

At a point on a demand curve where demand is inelastic, a monopolist’s marginal revenue is which of the following

None of the other answers are true.

equal to price times the slope of the demand curve.

greater than price.

less than zero.

greater than one.

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Answer #1

Answer- Correct option is 'd'

At a point on a demand curve where the demand is inelastic, a monopolist's marginal revenue is less than zero. Because to sell a marginal unit the firm would have to lower the selling price so much that it would lose more revenue on the pre-existing unit. When demand is inelastic, the marginal revenue is negative. When demand is elastic, marginal revenue is positive and when demand is unitary elastic, marginal revenue equals zero.

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