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- Subject
- Monopolyeconomics-mcqs › monopoly
- Published
- 30 May 2019
- Last updated
- 28 May 2026
For a monopolist, how does the marginal revenue from producing one more unit compare to the price of that unit?
Multiple choice question for Monopoly. Select an option, then review the explanation below.
Explanation
The marginal revenue for a monopolist is always less than the price of the product because when the firm increases output, the price effect (which lowers revenue on all units sold) outweighs the output effect (which increases revenue from selling more units). Therefore, marginal revenue lies below the price.
More Monopoly MCQs
Practice related questions from the same subject.
- 1.Which option best describes the concept of price discrimination?
- 2.In contrast to a perfectly competitive market, what is a monopolist more inclined to do?
- 3.In a pure monopoly market, how does the price compare to the marginal revenue?
- 4.What action should a monopolist take when marginal revenue is greater than marginal cost?
- 5.What is the likely impact on production costs if a natural monopoly is divided into several smaller companies by regulators?