Question

This Test 48 42 of 48 (37 complete) This Question: 1 pt The monopolist estimates its marginal revenue curve, where marginal revenue is defined as the Vi in revenues due to a one unit change in quantity sold For the perfect competitor, price equals revenue equals average revenue. For the monopolist, revenue is always less than price because price must be reduced on all units to sell more The price V of demand for the monopolist depends on the number and similarity of substitutes. The more numerous the imperfect substitutes, the greater the price of the monopolist's demand curve Click to select your answers) FB 9:49P 7/30/2

1. percentage change OR change
2. total OR average
3. total OR marginal
4. total OR marginal
5. elasticity OR rigidity
6. rigidity OR elasticity
please answer asap

Answer 1

The monopolist estimates it's marginal revenue curve where marginal revenue is defined as change in total revenue due to a one unit change in quantity sold. Marginal revenue curve refers to the addition in total revenue when one more unit of good is produced.

For the perfect competitor, price equals marginal revenue equals average revenue. For the monopolist, marginal revenue is always less than price because price must be reduced on all units to sell more. In a perfect competition, price = marginal revenue= average revenue = demand.

The price elasticity of demand for the monopolist depends on the number and similarity of substitutes. The more numerous the imperfect substitutes, the greater the price elasticity of monopolist's demand curve. Higher the number of substitutes, consumers will be able to switch the demand with a price change and so higher elasticity of demand.