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17 July, 07:48

Explain why the marginal revenue curve facing a competitive firm differs from the marginal revenue curve facing a monopolist. unlike for perfectly competitive? firms, whose marginal revenue curves are the same as their individual demand? curves, a? monopolist's marginal revenue curve differs from its demand curve because

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  1. 17 July, 08:06
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    The correct answer to this question is that:

    In a monopoly, "the monopolist must lower the price on all units to sell one more unit of output".

    This means that in a monopoly market, if we increase the amount of output without lowering the price, the marginal revenue decreases. Therefore marginal revenue is indirectly proportional to number of outputs.

    In a perfect competition however, the marginal revenue is constant to any amount of output.
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