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Why is marginal revenue less than price for a monopolist?

Marginal revenue is less than price for a monopolist because in a monopoly market, the monopolist is the sole seller and has the power to set the price. To sell more units, the monopolist must lower the price, which reduces the revenue gained from each additional unit sold. This results in marginal revenue being less than the price.


What is the relationship between price and marginal revenue when a monopolist cuts the price to sell more?

Between them exist a simple line of difference, a monopolist can sale more with less money CHACHA!


What is the marginal revenue of a monopolist is?

The marginal revenue of a monopolist is the additional revenue generated from selling one more unit of a good or service. Unlike in perfect competition, a monopolist faces a downward-sloping demand curve, which means that to sell more units, it must lower the price on all units sold. As a result, marginal revenue is less than the price at which the additional unit is sold. This relationship is key to understanding a monopolist's pricing and output decisions.


Why do companies practice price discrimination?

Price discrimination is based on the idea that each customer has his or her own maximum price he or she will pay for a good. If a monopolist sets the good's price at the highest maximum price of all the buyers in the market, the monopolist will only sell to the one customer willing to pay that much. If the monopolist sets a low price, the monopolist will gain a lot of customers, but the monopolist will lose the profits it could have made from the customers who bought at the low price but were willing to pay more. Price discrimination recognizes that groups of consumers are willing and able to pay different amounts for a good. (gradpoint)


Can a monopoly practice price discrimination?

The monopolist pricing condition occurs where marginal cost equals marginal revenue. The monopolist does not follow usual demand or supply curves. It instead optimises its total profit by setting its production decision (aka - how many units) to where the marginal profit of the last unit equals 0, then 'marking-up' the price by setting it directly above this equilibrium on the original demand curve. The total profit derived from this condition is called the monopolist profit.

Related Questions

Why is marginal revenue less than price for a monopolist?

Marginal revenue is less than price for a monopolist because in a monopoly market, the monopolist is the sole seller and has the power to set the price. To sell more units, the monopolist must lower the price, which reduces the revenue gained from each additional unit sold. This results in marginal revenue being less than the price.


What is the relationship between price and marginal revenue when a monopolist cuts the price to sell more?

Between them exist a simple line of difference, a monopolist can sale more with less money CHACHA!


What is the marginal revenue of a monopolist is?

The marginal revenue of a monopolist is the additional revenue generated from selling one more unit of a good or service. Unlike in perfect competition, a monopolist faces a downward-sloping demand curve, which means that to sell more units, it must lower the price on all units sold. As a result, marginal revenue is less than the price at which the additional unit is sold. This relationship is key to understanding a monopolist's pricing and output decisions.


Who came up with the idea for cattle trails?

More than likely it was a Texican. In order to sell your product you must first get it to market.


How do you sell multivitamins product?

You have to be a manufacturer and sell to pharmacies etc. Must be checked by physicist, pharmacist etc.


Why do companies practice price discrimination?

Price discrimination is based on the idea that each customer has his or her own maximum price he or she will pay for a good. If a monopolist sets the good's price at the highest maximum price of all the buyers in the market, the monopolist will only sell to the one customer willing to pay that much. If the monopolist sets a low price, the monopolist will gain a lot of customers, but the monopolist will lose the profits it could have made from the customers who bought at the low price but were willing to pay more. Price discrimination recognizes that groups of consumers are willing and able to pay different amounts for a good. (gradpoint)


Why do companies practice discrimination?

Price discrimination is based on the idea that each customer has his or her own maximum price he or she will pay for a good. If a monopolist sets the good's price at the highest maximum price of all the buyers in the market, the monopolist will only sell to the one customer willing to pay that much. If the monopolist sets a low price, the monopolist will gain a lot of customers, but the monopolist will lose the profits it could have made from the customers who bought at the low price but were willing to pay more. Price discrimination recognizes that groups of consumers are willing and able to pay different amounts for a good. (gradpoint)


What can you sell in Mexico?

Everything, but you need to be more specific on the product you are trying to sell.


Are marginal revenue average revenue and price are all equal for a monopolist?

No, in a monopolistic market, marginal revenue is less than average revenue and price. This is because the monopolist must lower the price in order to sell more units, leading to a decline in revenue per unit.


Why do companies export their products?

To reach more customers and sell more product.


Can a monopoly practice price discrimination?

The monopolist pricing condition occurs where marginal cost equals marginal revenue. The monopolist does not follow usual demand or supply curves. It instead optimises its total profit by setting its production decision (aka - how many units) to where the marginal profit of the last unit equals 0, then 'marking-up' the price by setting it directly above this equilibrium on the original demand curve. The total profit derived from this condition is called the monopolist profit.


What is a franchised retailer?

A store or location that is authorized by a manufacturer or distributor to sell a specific product under specific instructions. i.e. McDonald's (must sell only their products), Chevrolet, etc.