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Author Question: Describe the marginal revenue curve in relationship to the demand curve for a monopoly. Why is it ... (Read 200 times)

dbose

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on: Jun 29, 2018
Describe the marginal revenue curve in relationship to the demand curve for a monopoly. Why is it like that?
 
  What will be an ideal response?

Question 2

Refer to Figure 4-9. What is the size of the unit tax?
 
  A) 8 B) 5
  C) 3 D) cannot be determined from the figure


kristenb95

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The marginal revenue curve lies below the demand curve because the monopolist must decrease price in order to sell more output. Therefore each additional unit sold yields its price less the decreased price for each previous unit sold.

Answer to Question 2

B


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