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In Monopoly at various output levels

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Economics
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In Monopoly at various output levels

Answer & Solution
Correct Answer: Option C
A firm under monopoly faces a downward sloping demand curve or average revenue curve. In monopoly, since average revenue falls as more units of output are sold, the marginal revenue is less than the average revenue. In other words, under monopoly the MR curve lies below the AR curve.
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2 Comments
Umar Idrees
Umar Idrees 3 years ago
A monopolist faces a downward-sloping demand curve, he has to sacrifice price to sell additional units. This always leads to marginal revenue (MR) being less than the average revenue (AR) so the answer is option "B".
Xulfiqar Ali
Xulfiqar Ali 6 years ago
I think option c is correct
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