QuestionJune 2, 2025

Fill in the Blank Question If there were no price effect, then marginal revenue for a monopolist would be equal to the square

Fill in the Blank Question If there were no price effect, then marginal revenue for a monopolist would be equal to the square
Fill in the Blank Question
If there were no price effect, then marginal revenue for a monopolist would be equal to the square

Solution
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Answer

Demand Curve Explanation 1. Define Marginal Revenue Marginal revenue (MR) is the additional revenue gained from selling one more unit. 2. Understand Price Effect In a monopoly, the price effect reduces MR because lowering price to sell more units decreases revenue from existing units. 3. Consider No Price Effect Without the price effect, MR equals the price of the additional unit sold. 4. Relate to Demand Curve The demand curve represents the price consumers are willing to pay for each quantity.

Explanation

1. Define Marginal Revenue<br /> Marginal revenue (MR) is the additional revenue gained from selling one more unit.<br />2. Understand Price Effect<br /> In a monopoly, the price effect reduces MR because lowering price to sell more units decreases revenue from existing units.<br />3. Consider No Price Effect<br /> Without the price effect, MR equals the price of the additional unit sold.<br />4. Relate to Demand Curve<br /> The demand curve represents the price consumers are willing to pay for each quantity.
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