In case of monopoly, the price charged against the additional unit is:

Correct Answer : C.

The monopolist's marginal revenue from each unit sold does not remain constant as in the case of the perfectly competitive firm. The monopolist faces the downward-sloping market demand curve, so the price that the monopolist can get for each additional unit of output must fall as the monopolist increases its output. Consequently, the monopolist's marginal revenue will also be falling as the monopolist increases its output. Now if we assume here that the monopolist is not a price discriminate then the monopolist's marginal revenue from each additional unit produced will not equal the price that the monopolist charges. In fact, the marginal revenue that the monopolist receives from producing an additional unit of output will always be less than the price that the monopolist can charge for the additional unit.}