Answer to Question #287638 in Microeconomics for mina

Question

⦁ What is the relationship between the marginal revenue curve and the demand curve for a single-price monopolist?

Answer 1

Both the marginal revenue curve and demand curve are downward sloping curves that have same y- intercept but the marginal revenue curve is twice as steep as that demand curve.

Since the demand curve reflects the price and the marginal revenue curve is below the demand curve, the price is no longer equal to the marginal revenue as it was in the pure competition.