contestada

A nondiscriminating pure monopoly must decrease the price on all units of a product to sell more units. This explains why:_______.
a. there are barriers to entry in pure monopoly
b. a pure monopoly has a perfectly elastic demand curve
c. a pure monopoly’s marginal revenue curve is below its demand curve
d. total revenues are greater than total costs at the profit maximizing level of output

Respuesta :

Answer:

c. a pure monopoly’s marginal revenue curve is below its demand curve

Explanation:

As we know that the marginal revenue is the increase in the total revenue. In the case when the prices reduces and the quantity increased so the change would be less. Also, the average revenue would be high than the marginal revenue as it spread due to the entire number of outputs.

Moreover, the curve of MR and AR always downward slope that represents that if there is a high output so the price would be reduced

So in the given situation, the marginal revenue would be less than the average revenue curve in the case of monopoly

Therefore the correct option is c.

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