question archive For a single-price monopoly, the marginal revenue curve A

For a single-price monopoly, the marginal revenue curve A

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For a single-price monopoly, the marginal revenue curve

A. is horizontal

B. is vertical

C. is same as demand curve

D. lies above demand curve

E. lies below demand curve

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Ans: E. lies below demand curve.

Marginal revenue is the additional revenue earned by selling an additional unit of output. In a monopoly market since there is a single seller, the monopolist can sell more only when it reduces it's price. So, for a monopoly firm marginal revenue is less than price. Thus, for a single-price monopoly, the marginal revenue curve lies below demand curve.

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