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23 June, 00:30

What is true with respect to the demand of a monopolist?

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  1. 23 June, 00:41
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    Average revenue is greater than marginal cost when the monopolist is maximizing total profits or minimizes losses. Marginal revenue decreases as average revenue decreases.

    Explanation:

    A monopolist controls all of the markets for a particular good or service. A monopolist does not need to improve their product much because customers have no other alternatives.

    In the case of pure monopoly, no close substitutes for the product exist and there is one seller.

    Average revenue is greater than marginal cost when the monopolist is maximizing total profits or minimizes losses. Marginal revenue decreases as average revenue decreases.
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