Question : The marginal revenue of a monopolist is
Option 1: more than price .
Option 2: equal to price .
Option 3: less than price .
Option 4: less than marginal cost .
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Correct Answer: less than price .
Solution : The correct option is less than price.
The marginal revenue in a monopolistic market is always less than the product's price. A monopolist is the only seller in the market, hence in order to sell more units, they must cut the price of every unit they sell, not just the extra one. Because of this, a monopolist's marginal revenue curve dips downward and lies below the demand curve.
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