Apure monopoly will find that marginal revenue rev: 05_15_2018 multiple choice
a) is sometimes greater and sometimes less than price
b) is identical to price
c) is less than price
d) exceeds price

The correct answer is option B.

Explanation:

A pure monopoly can be defined as a market where there is only a single seller and the product has no close substitutes available. This possible because of high barriers on entry and exit of the firms in the market.

A pure monopoly firm faces a downward-sloping demand curve, it is a price maker. The price and output are determined by the point where marginal revenue and marginal cost are equal.

So, at the point of equilibrium, marginal revenue, marginal cost and price will be equal.

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