When a monopolist produces an additional unit, the marginal revenue generated by that unit must be ?

Question

When a monopolist produces an additional unit, the marginal revenue generated by that unit must be ?

Answer 1

A. below the price because the price effect outweighs the output effect
B. above the price because the output effect outweighs the price effect
C. above the price because the price effect outweighs the output effect
D. below the price because the output effect outweighs the price effect

Correct Answer: below the price because the price effect outweighs the output effect ✔

Last Updated: June 18, 2019