question archive A uniform price monopolist's marginal revenue will always be less than market price except for the first unit sold
A uniform price monopolist's marginal revenue will always be less than market price except for the first unit sold
Subject:MarketingPrice:2.88 Bought18
A uniform price monopolist's marginal revenue will always be less than market price except for the first unit sold. This is because:
a. there are substantial startup costs and other barriers to entry.
b. demand and marginal revenue have an inverse relationship.
c. monopolists always have higher production costs than other types of firms or industries.
d. the monopolist must reduce the price of all units of output, not just an additional unit, in order to increase sales.
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
The correct answer is a. there are substantial startup costs and other barriers to entry.
This is the correct answer because of the presence of certain production cost. The monopolist has to keep the price of the initial unit at a low level to gain the market share. This strategy would lead to attracting consumers in the market. For the further units to be sold, the monopolist would improve the price level, where the marginal revenue would be equal to the marginal cost.
