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What is the relationship between the demand curve and marginal revenue curve in a monopoly?A monopolist's marginal revenue curve is always less than its demand curve.
What is the relationship between a monopolist's demand curve?
Is the marginal revenue curve for a monopoly is the same as its demand curve?If a monopolist has a linear demand curve, then it has a linear marginal revenue curve. A profit-maximizing monopolist will never produce a quantity that corresponds to a point on the inelastic portion of its demand curve. A monopolist will shut down in the short run if price is everywhere less than average total cost.
Why is the marginal revenue curve below the demand curve in a monopoly?For a monopoly, the marginal revenue curve is lower on the graph than the demand curve, because the change in price required to get the next sale applies not just to that next sale but to all the sales before it.
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