WAEC Economics 2021 Objective — Question 21
Question 21 of 50 from the West African Examinations Council (WAEC) Economics 2021 Objective paper, with the correct answer and a full explanation.
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21. The relationship between the Marginal Revenue (MR) and the Average Revenue (AR) of a monopolist is that the marginal revenue curve
- A. is above the average revenue curve.
- B. is below the average revenue curve.Correct
- C. and the AR curve are downward sloping and are identical.
- D. is vertical while the average revenue curve is horizontal.
Explanation
For a monopolist facing a downward-sloping demand (AR) curve, the MR curve lies below the AR curve at every output level.
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