Q217
In Monopoly at various output levels
A.
AR = MR
B.
AR < MR
C.
AR > MR
AnswerD.
None of the above
Answer: Option C
Solution
Answer: Option C
Solution:
A firm under monopoly faces a downward sloping demand curve or average revenue curve. In monopoly, since average revenue falls as more units of output are sold, the marginal revenue is less than the average revenue. In other words, under monopoly the MR curve lies below the AR curve.