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Homework answers / question archive / Why is marginal revenue less than price for every level of output for a monopolist? Explain
Why is marginal revenue less than price for every level of output for a monopolist? Explain.
The marginal revenue of a monopolist is less than price because he/she has to lower the price on all units in order to sell extra units of output. This makes the marginal revenue curve to lie below the demand curve and its slope is twice the slope of the demand curve.
