The relationship between the marginal revenue (MR) and the average revenue (AR) of a monopolist...

WAEC 2025

The relationship between the marginal revenue (MR) and the average revenue (AR) of a monopolist is that the marginal revenue
curve

A. is vertical while the average revenue curve is horizontal
B. slopes down to the right and is below the AR curve
C. and the AR curve are downward sloping and are identical
D. is above the average revenue curve

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Correct Answer: Option B

Explanation

In a monopoly, the marginal revenue (MR) curve is always below the average revenue (AR) curve and slopes downwards. This is
because a monopolist can only sell more by lowering the price, which reduces both the average revenue and the marginal revenue.

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