Home

What is the correct answer?

4

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

A. Not different

B. Same

C. Not same

D. Zero

Correct Answer :

C. Not same


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.}

Related Questions

If the marginal utility of apples to a consumer exceeds that of bananas… Identify the work of Irving Fisher: In the case of substitutes, the cross demand curve slopes The equilibrium of a firm is determined by the equality of MC and MR in… Diseconomies of management lead to: In discriminating monopoly (price discrimination), the elasticity of demand… Rotten eggs are: The coefficient of the price elasticity of demand is computed as the absolute… The relationship between MC and MP shown by the marginal cost concept… The competitive equilibrium leads to: In monopolistic competition, the individual demand curve is also known… In case of perfect competition, TR curve rises at a: Marginal Productivity Theory deals with the theory of: Excess capacity is not found under: If a consumer buys a product that costs Rs.3 and provides an additional… The combination of labor and capital where the cost of a given output… In case of monopoly, the price charged against the additional unit is: Perfect competition assumes: In Prisoners Dillemma, the players are: Increase in demand occurs when: Of the following commodities, which has the lowest price-elasticity of… In monopolistic competition, because of difference in choices, the firm… With the expansion of output, the short run average cost curve, beyond… Cournot equilibrium is attained where two reaction curves: In a socialist (communist) economy the invisible hand: In cournot model, at equuilibrium when MC = MR, the elasticity of demand… In long run competitive equilibrium: In perfect competition, the slope of the total revenue curve of a firm… In Nash equilibrium, a player: In real life firms: