Why doesn't demand equal marginal revenue in a monopoly and how come this discrepancy occurs?

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1021621

2026-03-07 01:20

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In a monopoly, demand does not equal marginal revenue because the monopoly firm has the power to set prices higher than the marginal revenue. This discrepancy occurs because the monopoly has control over the market and can influence prices to maximize profits, unlike in a competitive market where prices are determined by supply and demand forces.

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